Aging of Accounts Receivable Waffle Company's accounts receivable reveal the following balances: Age of Accounts Current.... 1-30 days past due 31-60 days past due 61-90 days past due 91-120 days past due Receivable Balance $720,000 395,000 105,000 52,000 13,000 The credit balance in Loss Allowance is now $42,000. After a thorough analysis of its collection history, the company estimates that the following percentages of receivables will eventually prove uncollectible: Current.. 1-30 days past due 31-60 days past due 61-90 days past due 91-120 days past due 0.5% 3.0 16.0 52.5 92.0 Prepare an aging schedule for the accounts receivable, and give the journal entry for recording the necessary change in the loss allowance account.
Bad Debts
At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
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