Daley Company prepared the following aging of receivables analysis at December 31.
Daley Company prepared the following aging of receivables analysis at December 31.
a. Estimate the balance of the Allowance for Doubtful Accounts assuming the company uses 4.5% of total accounts receivable to estimate uncollectibles, instead of the aging of receivables method.
b. Prepare the adjusting entry to record Bad Debts Expense using the estimate from part a. Assume the unadjusted balance in the Allowance for Doubtful Accounts is a $12,000 credit.
c. Prepare the adjusting entry to record bad debts expense using the estimate from part a. Assume the unadjusted balance in the Allowance for Doubtful Accounts is a $1,000 debit.
Homework Answers
a) Estimated allowance for doubtful accounts = 570000*4.5% = 25650
b) Adjusting entry
| date | account and explanation | Debit | Credit |
| Dec 31 | Bad debt expense (25650-12000) | 13650 | |
| Allowance for doubtful accounts | 13650 | ||
| (To record adjusting entry) |
c) Adjusting entry
| date | account and explanation | Debit | Credit |
| Dec 31 | Bad debt expense (25650+1000) | 26650 | |
| Allowance for doubtful accounts | 26650 | ||
| (To record adjusting entry) |
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Daley Company prepared the following aging of receivables analysis at December 31.
Daley Company prepared the following aging of receivables analysis at December 31.
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Daley Company estimates uncollectible accounts using the allowance method at December 31. It prep...
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Daley Company prepared the following aging of receivables analysis at December 31.Days Past DueTotal0 1 to 30 31 to 60 61 to 90 Over 90 Accounts receivable$585,000$399,000$93,000$39,000$21,000$33,000Percent uncollectible 1%2%5%7% 10%a. Complete the below table to calculate the estimated balance of Allowance for Doubtful Accounts using aging of accounts receivable. b. Prepare the adjusting entry to record Bad Debts Expense using the estimate from part a. Assume the unadjusted balance in the Allowance for Doubtful Accounts is a $3,900 credit. c. Prepare the adjusting entry to record bad debts...
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