A partially competed aging of receivables schedule for Lindy Designs\' is shown
ID: 2572992 • Letter: A
Question
A partially competed aging of receivables schedule for Lindy Designs' is shown below. Calculate the amount that is estimated to be uncollectible.
a. Determine the amount estimated to be uncollectible by completing the aging of receivables schedule. Round calculations to the nearest dollar.
b. If the Allowance for Doubtful Accounts has a credit balance of $9,700, record the adjusting entry for the bad debt expense for the year.
c. If the Allowance for Doubtful Accounts has a debit balance of $9,700, record the adjusting entry for the bad debt expense for the year.
Est. Uncollectible Accts Age Interval: Balance: Percentage: Amount: Not past due 550,000 2.50% 1~30 days past due: 96,500 4.00% 31~60 days past due: 43,750 9.50% 61~90 days past due: 22,250 16.00% 91~180 days past due: 5,600 31.00% 181~365 days past due: 3,100 60.00% Over 365 days past due: 1,250 95.00% Total: 722,450Explanation / Answer
a) Est. Uncollectible Accts Age Interval: Balance: Percentage: Amount: Not past due 5,50,000 2.50% 13,750.00 1~30 days past due: 96,500 4.00% 3,860.00 31~60 days past due: 43,750 9.50% 4,156.25 61~90 days past due: 22,250 16.00% 3,560.00 91~180 days past due: 5,600 31.00% 1,736.00 181~365 days past due: 3,100 60.00% 1,860.00 Over 365 days past due: 1,250 95.00% 1,187.50 Total: 7,22,450 30,109.75 b) Date Account Head & Description Debit Amount Credit Amount Dec 31 Bad debt expense (30109.75-9700) 20409.75 Allowance for doubtful accounts 20409.75 (to record the bad debt expenses) c) Date Account Head & Description Debit Amount Credit Amount Dec 31 Bad debt expense (30109.75+9700) 39809.75 Allowance for doubtful accounts 39809.75 (to record the bad debt expenses)
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