The totals from the Savoy Company\'s Schedule of Accounts Receivable by Age as o
ID: 2490117 • Letter: T
Question
The totals from the Savoy Company's Schedule of Accounts Receivable by Age as of the end of the current year are shown below.
As of the end of the current year, there is a debit balance of $75 in the Allowance for Doubtful Accounts.
To estimate uncollectible accounts use the following rates:
Current 1%
1-30 days past due 5%
31-60 days past due 15%
Over 60 days past due 40%
Compute the amount of the adjusting entry for uncollectible accounts expense.
Account Balance Current 1-30 31-60 Over 60 Totals $11,800 $9,200 $1,500 $600 $500
Explanation / Answer
Estimate of uncollectible accounts:
current = 9200 * 1% = 92
1-30 = 1500 * 5% = 75
31-60 = 600 * 15% =90
above 60 = 500 * 40% = 200
Total estimated uncollectible accounts = $457
Less: Debit balance in Allowance for Doubtful Accounts = $75
The amount of the adjusting entry for uncollectible accounts expense = $382
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