Chapter 9 Homework Help 6 Daley Company estimates uncollectible accounts using t

Question

Chapter 9 Homework Help 6 Daley Company estimates uncollectible accounts using the allowance method at December 31. It prepared the following aging of receivables analysis. Past 0 1 to 30 31 to 60 61 to 90 Over 90 $90,000 $36,000 $18, 000 $30,000 Accounts receivable$570,000 $396, 000 18 28 5% 75 10% uncollectible Hint a Estimate the balance ofthe Allowance for Doubtful Accounts assuming the company uses 4.5% of total accounts receivable to estimate uncollectibles, instead of the aging of receivables method b. Prepare the adjusting entry to record Bed Debts Expense using the estimate from part a Assume the unadjusted balance in the Print Allowance for Doubtful Accounts is a $12,000 credit Alowpnee for Douestli toy s 's 1o igthe estmate from par d Asume the unadjusted bolance in the References Complete this question by entering your answers in the tabs below Req A Req B and c Estimate the balance of the Allowance for Doubtful Accounts estimate uncollectibles, instead of the aging of receivables method. assuming the company uses 45% of total accounts receivable to the Estimated balance of allowance for uncollectibles Req B and C >

Explanation / Answer

Ans)

a) Estimated balance of allowance for uncollectibles = 570,000 X 4.5 % = 25,650

b) Bad debt expense 13,650

Allowance for doubtful accounts 13,650

c) Bad debt expense 26,650

Allowance for doubtful accounts 26,650

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