Question

Required information The following information applies to the questions displayed below) Daley Company prepared the following aging of receivables analysis at December 31 Days Past Due Total $585,000 $399,000 Accounts receivable Percent uncollectible 1 to 30 31 to 60 61 to 90 Over 90 $93,000 $39,000 $21,000 $33,000 26 54 74 105 1 a. Estimate the balance of the Allowance for Doubtful Accounts assuming the company uses 6% 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 $12,300 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 $1,300 debit.

Answer 1

Req A)	Estimated balance of allowance for uncollectibles					35100
b)	Date	General Journal				Debit	Credit
	31-Dec	Bad debts expense				22800
		Allowance for doubtful accounts					22800
	31-Dec	Bad debts expense				38200
		Allowance for doubtful accounts					38200