O’Brien Sports and Outdoors reports the following analysis of potential losses i
ID: 2423881 • Letter: O
Question
O’Brien Sports and Outdoors reports the following analysis of potential losses in its accounts receivable:
Accounts Age
Balance
Estimated Uncollectible %
Current (not yet due)
$96,000
1.0%
1-30 past due
$64,000
3.5%
31-60 past due
$16,000
12.0%
61-90 past due
$6,500
42.0%
Over 90 days past due
$3,200
67.0%
Total
$185,700
The balance of Allowance for Doubtful Accounts is $200 credit balance on March 31, 2015 prior to adjustments. Prepare the entry to book bad deb.
Accounts Age
Balance
Estimated Uncollectible %
Current (not yet due)
$96,000
1.0%
1-30 past due
$64,000
3.5%
31-60 past due
$16,000
12.0%
61-90 past due
$6,500
42.0%
Over 90 days past due
$3,200
67.0%
Total
$185,700
Explanation / Answer
Calculation of Amount of Doubtful Debts Account Balance Estimated Uncollectible Current 96,000 960 1-30 past due 64,000 2,240 31-60 past due 16,000 1,920 61-90 past due 6,500 2,730 Over 90 days past due 3,200 2,144 Total 185,700 9,994 Journal Entry Date Particulars Dr. Amount Cr. Amount Bad Debts Dr. 9794 To Provision For Bad debts 9794 (Provision for bad debts made $9994 - $200 = $9794 )
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