Question

Chapter 07 Homework i Saved Part 1 of 2 Required information The following information applies to the questions displayed below. Jarden Company has credit sales of $2,600,000 for year 2018. On December 31, 2018, the company's Allowance for Doubtful Accounts has an unadjusted credit balance of $20,814. Jarden prepares a schedule of its December 31, 2018, accounts receivable by age. On the basis of past experience, it estimates the percent of receivables in each age category that will become uncollectible. This information is summarized here. points December 31, 2018 Accounts Receivable $ 520,000 208,000 41,600 20,800 4,160 Age of Accounts Receivable Not yet due 1 to 30 days past due 31 to 60 days past due 61 to 90 days past due Over 90 days past due Expected Percent Uncollectible 1.50% 2.25 6.75 34.00 71.00 eBook Print References 1. Estimate the required balance of the Allowance for Doubtful Accounts at December 31, 2018, using the aging of accounts receivable method. Accounts Receivable Percent Uncollectible (#.##%) Estimated Uncollectible Not due: 1 to 30: 31 to 60 61 to 90: Over 90 Estimated balance of allowance for uncollectibles

Answer 1

Requirement 1

	Accounts receivables	x	Percent Uncollectable (%)	=	Estimated Uncollectable
Not due:	$      520,000.00	x	1.50%	=	$         7,800.00
1 to 30 days	$      208,000.00	x	2.25%	=	$         4,680.00
31 to 60	$        41,600.00	x	6.75%	=	$         2,808.00
61 to 90	$        20,800.00	x	34.00%	=	$         7,072.00
Over 90	$          4,160.00	x	71.00%	=	$         2,953.60
Estimated balance of allowance for doubtful accounts					$       25,313.60

Requirement 2

Date	General Journal	Debit	Credit
Dec 31	Bad debts expense	$          4,499.60
	Allowance for doubtful accounts		$    4,499.60
	(To record bad debts expense)

Working

Estimated balance of allowance for uncollectables required in credit	$ 25,313.60	Cr
Less: Balance in Allowance for uncollectable account (Cr) (Already available credit)	$ 20,814.00	Cr
Total bad debts to be recorded	$    4,499.60	Cr