Question

31, 2018, before any year-end adjustments, the Accounts Receivable balance of MJT Technology, Inc., is $310,000. The All sa(n) $17,100 credit balance. MJT Technology prepares the following aging schedule for Accounts Receivable: icon to view the agings quirements. i Requirements ph? Toc mnt 1. Based on the aging ate a revised allowance fo e for Uncollectible Accou Dalance needed 1-30 31-60 61-90 1. Based on the aging of Accounts Receivable, is the unadjusted balance of the allowance account adequate? Too high? Too low? 2. Make the entry required by the aging schedule. Prepare a T-account for the allowance. 3. Show how MJT Technology will report Accounts Receivable on its December 31 balance sheet. Print Done number in the edit fields and then click Check Answer. Ch. Clear All mining To see what to study next, go to your Study Plan. ch od se ê . 9

Answer 1

Fist we compute the estimated Uncollectible Receivables as follows:

	Amount of Receivables (A)	Estimated uncollectible (%) (B)	Estimated uncollectible (Amount) (A*B)
1-30	120000	0.50%	600
31-60	90000	2.00%	1800
61-90	60000	5.00%	3000
90+	40000	40.00%	16000
TOTAL	310000		21400

Existing Balances of:

• Accounts Receivables $ 310000 Dr
• Allowance for Uncollectible accounts $ 17100 Cr

Requirement 1:

1. based on the aging, the unadjusted balance of allowance account is NOT sufficient. It is Too Low.

1-30	600
31-60	1800
61-90	3000
90+	16000
Subtotal	21400
Less: Unadjusted Balance	17100
Adjusting entry amount	4300

Requirement 2:

The entry is:

Bad debt expense a/c Dr	4300
To Allowance for Uncollectible Accounts		4300

Allowance for Uncollectible accounts

			1/1/2018	By Balance b/d	17100
31/12/18	To Balance c/d	21400	31/12/18	By Bad debts expense	4300
	Total	21400		Total	21400
			1/1/2019	By Balance b/d	21400

Requirement 3:

Partial Balance Sheet

Assets
Gross Accounts Receivable	310000
Less: Allowance for Uncollectible Accounts	21400
Net Accounts Receivable	288600

Please comment in case of any query regarding this solution.