Question

Twilight Company uses the aging of accounts receivable method to estimate Bad Debt Expense. The balance of each account receivable is aged on the basis of three categories as follows: (1) 1-30 days old, (2) 31-90 days old, and (3) more than 90 days old. Based on experience, management has estimated what portion of receivables of a specific age will not be paid as follows: (1) 2%, (2) 14%, and (3) 38%, respectively At December 31, 2019, the unadjusted credit balance in the Allowance for Doubtful Accounts was $150. The total Accounts Receivable in each age category were: (1) 1-30 days old. $72000. (2) 31-90 days old, $16,000, and (3) more than 90 days old, $6,000 Required: a. Calculate the estimate of uncollectible accounts at December 31, 2019 b. Prepare the appropriate adjusting entry dated December 31, 2019 Complete this question by entering your answers in the tabs below. Required A Required B Calculate the estimate of uncollectible accounts at December 31, 2019 Estimated uncollectible accounts

Answer 1

solution @ computation of estimatich of uncollectable accounts at December 31, 2019. Period Account receivable % uncollectible estimated uncollectible 1-30days $ 2.000 1440 31-90 days $ 16,000 ul 2.Quo 2.280 $ 6,000 more than 90 Total - $5,960 6 Preparation of Adjusted entry dated December 31.2019 Date Account title and explanation Debit credit 5,810 Dec-3i, 2019 5,810 . Bad debts expense Allowance for doubtful Accounts ( $5,960-150) [To record Adjusting entry ]