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Domino Company uses the aging of accounts receivable method to estimate uncollectible accounts expense. Domino began...

Domino Company uses the aging of accounts receivable method to estimate uncollectible accounts expense. Domino began Year 2 with balances in Accounts Receivable and Allowance for Doubtful Accounts of $44,390 and $3,470, respectively. During the year, the company wrote off $2,640 in uncollectible accounts. In preparation for the company's Year 2 estimate, Domino prepared the following aging schedule: Number of days Receivables % Likely to be past due amount uncollectible Current $ 71,000 1% 0-30 27,000 5% 31-60 6,860 10% 61-90 3,520 25% Over 90 3,200 50% Total $ 111,580 What will Domino record as Uncollectible Accounts Expense for Year 2?

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Answer #1

Un-adjusted Balance in Allowance account =Beginning balance -Write off

                   = 3470 - 2640

                  = $ 830

SCHEDULE OF ESTIMATED ALLOWANCE FOR DOUBTFUL ACCOUNT AT END
current 71000 1% 71000*1%= 710
0-30 27000 5% 1350
31-60 6860 10% 686
61-90 3520 25% 880
over 90 3200 50% 1600
ESTIMATED ALLOWANCE FOR DOUBTFUL ACCOUNT AT END 5226

Uncollectible Accounts Expense = Balance at end -unadjusted balance

             = 5226 - 830

             = $ 4396

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