Implications of the changes in the aging schedule

Assignment Help Accounting Basics

Reference no: EM13146931

Prepare entries for recognizing accounts receivable.

Balance, March 31

Month of Sale 2007 2006

March $65,000 $75,000

February 12,600 8,000

December and January 10,100 2,400

November and October 7,400 1,100

$95,100 $86,500

Credit terms are 2/10, n/30. At March 31, 2007, there is a $2,200 credit balance in Allowance for Doubtful Accounts prior to adjustment. The company uses the percentage of receivables basis for estimating uncollectible accounts. The company's estimates of bad debts are as shown on page 402.

Estimated Percentage

Age of Accounts Uncollectible Age of Accounts Uncollectible

Current 2%

1-30 days past due 7
31-90 days past due 30
Over 90 days 50

Instructions

(a) Determine the total estimated uncollectibles.

(b) Prepare the adjusting entry at March 31, 2007, to record bad debts expense.

Reference no: EM13146931

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