Stine Company has accounts receivable of $104,700 at March 31, 2014. An analysis
ID: 2448610 • Letter: S
Question
Stine Company has accounts receivable of $104,700 at March 31, 2014. An analysis of the accounts shows these amounts.
Balance, March 31
Month of Sale
2014
2013
$72,600
$76,600
13,600
8,100
10,100
3,800
8,400
1,300
$104,700
$89,800
Credit terms are 3/10, n/30. At March 31, 2014, there is a $2,400 credit balance in Allowance for Doubtful Accounts prior to adjustment. The company uses the percentage-of-receivables basis for estimating uncollectible accounts. The company’s estimates of bad debts are as shown below.
Age of Accounts
Estimated Percentage
Uncollectible
Prepare the adjusting entry at March 31, 2014, to record bad debt expense.
Balance, March 31
Month of Sale
2014
2013
March$72,600
$76,600
February13,600
8,100
December and January10,100
3,800
November and October8,400
1,300
$104,700
$89,800
Explanation / Answer
Adjsuting entry
To Allowance for bad debts
(10543- 2400 = $8143)
Age of accounts Amount Estimated % Estimated bad debts Current $72,600 3% $2,178 1-30 $13,600 6% $ 816 31-90 $10,100 29% $2929 Over 90 $8,400 55% $4620 Total $104,700 $10543Related Questions
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