The following information applies to the questions displayed below arden Company
ID: 2550164 • Letter: T
Question
The following information applies to the questions displayed below arden Company has credit sales of $2.300,000 for year 2016 On December 31, 2016, the company's Allowance for Doubelul Accounts has an unadjusted credt balance of $17.473 Jarden prepares schedule of its December 31, 206, accounts recevable by age On the besis of past experience, it estimates the percent of receivables in each age category that will become uncollecsble This information is summarized here 31 2016 Age of Percent 84,000 36800 18.400 3.680 1 to 30 days past due 31 to 60 days pest due 61 to 90 days past due Over 90 days past due 2 05 6 55 3300Explanation / Answer
Account percentage estimate
Receivable uncollectible uncollectible
Not due $460,000 × 1.30% = $5,980
1 to 30 184,000 × 2.06% = 3,790.4
31 to 60 36,800 × 6.55% = 2,410.4
61 to 90 18,400 × 33% = 6,072
Over 90 3,680 × 69% = 2539.2
Estimate balance of allowance $ 20,792 credit
For uncollectible
2) unadjusted amount = $ 17,473
Estimate balance = $ 20,792
REQUIRED ADJUSTMENT = $ 3,319
Journal
Bad debt expenses A/C Dr. $3,319
To allowance for doubtful account $3,319
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