The aging of Torme Designs shown below. Calculate the amount of each periodicity range that is deemed to be uncollectible. The Allowance for Doubtful Accounts carries a credit balance of $1,135.00. Write the adjusting entry for the end of the current year. Est Uncollectible Accts Age Interval: Balance: Percentage: Amount: Not past due 850,000 3.50% 1~30 days past due: 47,500 5.00% 31~60 days past due: 21,750 10.00% 61~90 days past due: 11,250 20.00% 91~180 days past due: 5,065 30.00% 181~365 days past due: 2,500 50.00% Over 365 days past due: 1,145 95.00% Total: 939,210
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.
- The aging of Torme Designs shown below. Calculate the amount of each periodicity range that is deemed to be uncollectible. The Allowance for Doubtful Accounts carries a credit balance of $1,135.00. Write the
adjusting entry for the end of the current year.
|
|
Est Uncollectible Accts |
||
|
Age Interval: |
Balance: |
Percentage: |
Amount: |
|
Not past due |
850,000 |
3.50% |
|
|
1~30 days past due: |
47,500 |
5.00% |
|
|
31~60 days past due: |
21,750 |
10.00% |
|
|
61~90 days past due: |
11,250 |
20.00% |
|
|
91~180 days past due: |
5,065 |
30.00% |
|
|
181~365 days past due: |
2,500 |
50.00% |
|
|
Over 365 days past due: |
1,145 |
95.00% |
|
|
Total: |
939,210 |
|
|
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
