Assume you were recently hired by Caffe DAmore, the company that formulated the worlds first flavored instant
Question:
By analyzing collections of accounts receivable over the past five years, you were able to estimate bad debt loss rates for balances of varying ages. To estimate this year€™s uncollectible accounts, you jotted down the historical loss rates on the last page of a recent aged listing of out-standing customer balances (see below).
Required:
1. Enter the above totals in a spreadsheet and then insert formulas to calculate the total estimated uncollectible balance.
2. Prepare the year-end adjusting journal entry to adjust the Allowance for Doubtful Accounts to the balance you calculated above. Assume the allowance account has an unadjusted credit balance of $ 8,000.
3. Of the customer account balances shown above on the last page of the aged listing, which should be your highest priority for contacting and pursuing collection?
4. Assume Jumpy Jim€™s Coffee account is determined to be uncollectible. Prepare the journal entry to write off the entire account balance.
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Related Book For
Fundamentals of Financial Accounting
ISBN: 978-0078025914
5th edition
Authors: Fred Phillips, Robert Libby, Patricia Libby
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