Solution: Dr. Bad Debt Expense $10,500
Cr. Allowance for Uncollectible Accounts $10,500
Working: Year-end adjustment for uncollectible accounts = (Accounts not yet due * Estimation of uncollectible) + (Accounts 1-30 days past due * Estimation of uncollectible) + (Accounts more than 30 days past due * Estimation of uncollectible) + Debit current balance
= ($70,000 * 4%) + ($30,000 * 15%) + ($5,000 * 40%) + $1,200
= $10,500
As per policy we have to answer first question
the year, a company has the following accounts receivable and estimates of 2. At the end...
the year, a company has the following accounts receivable and estimates of 2. At the end of the year, a company has the follow uncollectible accounts: s not yet due - $70,000, estimated uncollectible = 4%. 2. Accounts 1-30 days past due $30,000; estimated uncollectible -15%. 3. Accounts more than 30 days past due = $5,000; estimated uncollectible = 40%. Record the year-end adjustment for uncollectible accounts, assuming the current balance of the Allowance for Uncollectible Accounts is $1,200 (debit).
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