Question

4. Given the following Paragraphe schedule of accounts receivable prepare the entry asume that you are using the allowance method to the allowance for bad debts, assuming the following estimates 005 (1/2 of Notre receives are collectible 015 ( 15 s betwee we collectie D ecember - de cette O f ects over 1 days are collectible Current 001 61 - 90 Customer $1,000 Customers Customer $2.000 $1,000 $100 31.10 $1.500 51.500

Answer 1

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Allowance for Doubtful Accounts that should be at year end:
	A	B	C=A*B
Age Group	Amount $	Uncollectible %	Allowance for Doubtful Accounts
Current	4,000.00	0.5%	20.00
0-30 Days	3,500.00	0.0%	-
31-60 Days	1,500.00	1.5%	22.50
61-90 Days	2,250.00	2%	45.00
91+ days	1,500.00	5%	75.00
	12,750.00		162.50
Bad debt expense at year end:
Allowance for Doubtful Accounts	162.50	See C
Already in the books	35.00	D
Bad debt expense at year end:	127.50	E=C-D
Adjusting Entry
Account	Debit ($)	Credit ($)
Bad debt Expense	127.50
Allowance for Doubtful Accounts		127.50