Question

O LIVUues Jieuule LU P3 Following is a list of credit customers along with their amounts owed due and the days past due at December 31. Following that list are five classifications of accounts receivable and estimated bad debts percent for each class. 1 to 30 Days Past Due 31 to 60 61 to 90 8% Percent uncollectible 38 Over 90 12 5% Days Past Due 11 Customer BCC Company Lannister Co. Mike Properties Ted Reeves Jen Steffens Accounts Receivable $5,400 2,400 6,400 1,200 3,400 106 80 1. Create an aging of accounts receivable schedule of accounts receivable by age similar to the table given above. Calculate the estimated balance for the Allowance for Doubtful Accounts. Estimated balance for Allowance for Doubtful Accounts 2. Assuming an unadjusted credit balance of $240, record the required adjustment to the Allowance for Doubtful Accounts.

Answer 1

Required 1 :

	Accounts receivables		Percent uncollectible		Estimated uncollectible
0	2400	x	1%	=	24
1 to 30	5400	x	3%	=	162
31 to 60	3400	x	5%	=	170
61 to 90	1200	x	8%	=	96
Over 90	6400	x	12%	=	768
Estimated balance of allowance for doubtful accounts					1220

Required 2 :
Bad debts amount = Estimated balance of allowance for doubtful accounts - Unadjusted credit balance of Allowance for doubtful accounts = 1220 - 240	980

Date	General Journal	Debit	Credit
Dec. 31	Bad debts expense	980
	Allowance for doubtful accounts		980