Young and Old Corporation (YOC) uses two aging categories to estimate uncollectible accounts. Accounts less than 60 days are considered young and have a 5% uncollectible rate. Accounts more than 60 days are considered old and have a 40% uncollectible rate. Required: 1. If YOC has $100,000 of young accounts and $400,000 of old accounts, how much should be reported in the Allowance for Doubtful Accounts? 2. If YOC's Allowance for Doubtful Accounts currently has an unadjusted credit balance of $40,000, how much should be credited to the account? 3. If YOC's Allowance for Doubtful Accounts has an unadjusted debit balance of $5,000, how much should be credited to the account?

Young and Old Corporation (YOC) uses two aging categories to estimate uncollectible accounts. Accounts less than 60 days are considered young and have a 5% uncollectible rate. Accounts more than 60 days are considered old and have a 40% uncollectible rate. Required: 1. If YOC has $100,000 of young accounts and $400,000 of old accounts, how much should be reported in the Allowance for Doubtful Accounts? 2. If YOC's Allowance for Doubtful Accounts currently has an unadjusted credit balance of $40,000, how much should be credited to the account? 3. If YOC's Allowance for Doubtful Accounts has an unadjusted debit balance of $5,000, how much should be credited to the account?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Young and Old Corporation (YOC) uses two aging categories to estimate uncollectible accounts. Accounts less than 60 days are considered young and have a 3% uncollectible rate. Accounts more than 60 days are considered old and have a 40% uncollectible rate. Required: 1. If YOC has $108,000 of young accounts and $480,000 of old accounts, how much should be reported in the Allowance for Doubtful Accounts? 2. If YOC's Allowance for Doubtful Accounts currently has an unadjusted credit balance of $48,000, how much should be credited to the account? 3. If YOC's Allowance for Doubtful Accounts has an unadjusted debit balance of $5,800, how much should be credited to the account? Answer is complete but not entirely correct. 1. Amount to be Reported 2$ 195,240 V 2. Amount to be Credited $ 195,240 x 3. Amount to be Credited 189,440 X
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