Home Page-ACCT 205501\"Waiting for response fx+ Jarden Company has credit sales

Question

Home Page-ACCT 205501"Waiting for response fx+ Jarden Company has credit sales of $2.40 million for year 2015 On December 31, 2015, the company's Allowance for Doubtful Accounts has an unadjusted credit balance of $15,304 Jarden prepares a schedule of ts 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 December 31, 2015 Age of $ 480,000 192,000 Not yet due 1 to 30 days past due 31 to 60 days past due 100% 175 6.25 19.20061 to 90 days past due 3,840 31.50 Over 90 days past due 65.00 1666 points Required: 1. Estimate the required balance of the Allowance for Doubtful Accounts at December 31, 2015, using the aging of accounts recelvable method Accounts Not due 1 to 30 31to60 1 to 90 Over 90 Estmated balance of alowance for uncollecsibles

Explanation / Answer

Account Receivable % uncollectible Expected % uncollectible Date Debit Credit Not due $        480,000 X 1.00% = $          4,800 31-Dec Bad debt expenses $        3,800 1 to 30 $        192,000 X 1.75% = $          3,360 Allowance for bad and doubtful accounts $        3,800 31 to 60 $          38,400 X 6.25% = $          2,400 (Additional provision made for bad debts) 61 to 90 $          19,200 X 31.50% = $          6,048 over 90 $            3,840 X 65.00% = $          2,496 Estimated balance $        19,104

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