[The following information applies to the questions displayed below.] Carmack Co

ID: 2470483 • Letter: #

Question

[The following information applies to the questions displayed below.]

Carmack Company has credit sales of $2.20 million for year 2015. On December 31, 2015, the company’s Allowance for Doubtful Accounts has an unadjusted credit balance of $13,617. Carmack prepares a schedule of its December 31, 2015, 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.

Estimate the required balance of the Allowance for Doubtful Accounts at December 31, 2015, using the aging of accounts receivable method. (Round your intermediate calculations and final answer to the nearest dollar amount. Omit the "$" sign in your response.)

Prepare the adjusting entry to record bad debts expense at December 31, 2015.(Round your intermediate calculations and final answers to the nearest dollar amount. Omit the "$" sign in your response.)

Explanation / Answer

December 31, 2015
Accounts Receivable

Age of
Accounts Receivable

Expected Percent Uncollectible

440,000

Not yet due

1.05

176,000

1 to 30 days past due

1.80

316.8000

35,200

31 to 60 days past due

6.30

221.760

17,600

61 to 90 days past due

31.75

55.88

3,520

Over 90 days past due

66.00

23.23

Total uncollectible $617.67

Beginning balance of bad debts allowance $13617

There is already sufficient balance in bad debts allowance account.