Allowance for Doubtful Debt help needed! Jarden Company has credit sales of $2.5

Question

Allowance for Doubtful Debt help needed!

Jarden Company has credit sales of $2.50 million for year 2015. On December 31, 2015, the company's Allowance for Doubtful Accounts has an unadjusted credit balance of $14,020. Jarden prepares a schedule of Its December 31, 2015, accounts recelvable by age. On the basis of past experience, It estimates the percent of recelvables In each age category that will become uncollectible. This Informatlon is summarized here December 31, 2015 Accounts Recelvable Expected Percent Uncollectible Age of $500,000 200,000 40,000 20,000 4,000 Accounts Recelvable Not yet due 1 to 30 days past due 31 to 60 days past due 61 to 90 days past due Over 90 days past due 0.90% 1.65 6.15 31.00 64.00 value 10.00 points Required 1. Estimate the required balance of the Allowance for Doubtful Accounts at December 31, 2015, using the aging of accounts receivable method ounts Receivable Percent Uncollectible # % stimate Uncollectible Not due 1 to 30 31 to 60 61 to 90 Over 90 Estimated balance of allowance for uncollectibles

Explanation / Answer

2)Bad debt expense       debit    5000

Allowance for doubtful account    credit 5000

[being adjusting entry for amount uncollectible recorded 19020-14020]

Accounts receivable % Estimated uncollectible Not due 500000 .9 4500 1-30 200000 1.65 3300 31-60 40000 6.15 2460 61-90 20000 31 6200 over 90 4000 64 2560 Estimated balance 19020

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