Coronado Corporation operates in an industry that has a high rate of bad debts. Before any year-end adjustments, the balance in Coronado's Accounts Receivable account was $591,900 and Allowance for Doubtful Accounts had a credit balance of $44,990. The year-end balance reported in the balance sheet for Allowance for Doubtful Accounts will be based on the aging schedule shown below. Days Account Outstanding Less than 16 days Between 16 and 30 days Between 31 and 45 days Between 46 and 60 days Between 61 and 75 days Over 75 days (to be written off) (a) Amount $314,500 112,400 85,000 44,200 19,900 15,900 Probability of Collection 0.98 Balance for allowance for doubtful accounts $ 0.90 0.86 0.79 0.55 0.00 What is the appropriate balance for Allowance for Doubtful Accounts at year-end?

Coronado Corporation operates in an industry that has a high rate of bad debts. Before any year-end adjustments, the balance in Coronado's Accounts Receivable account was $591,900 and Allowance for Doubtful Accounts had a credit balance of $44,990. The year-end balance reported in the balance sheet for Allowance for Doubtful Accounts will be based on the aging schedule shown below. Days Account Outstanding Less than 16 days Between 16 and 30 days Between 31 and 45 days Between 46 and 60 days Between 61 and 75 days Over 75 days (to be written off) (a) Amount $314,500 112,400 85,000 44,200 19,900 15,900 Probability of Collection 0.98 Balance for allowance for doubtful accounts $ 0.90 0.86 0.79 0.55 0.00 What is the appropriate balance for Allowance for Doubtful Accounts at year-end?

College Accounting, Chapters 1-27

23rd Edition

ISBN:9781337794756

Author:HEINTZ, James A.

Publisher:HEINTZ, James A.

Chapter16: Accounting For Accounts Receivable

Section: Chapter Questions

Problem 2CE: Tonis Tech Shop has total credit sales for the year of 170,000 and estimates that 3% of its credit...

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