Assume you were recently hired by Caffe D€™Amore, the company that formulated the world€™s first flavored instant cappuccino and now manufactures several lines of flavored cappuccino mixes. Given the company€™s tremendous sales growth, Caffe D€™Amore€™s receivables also have grown. Your job is to evaluate and improve collections of the company€™s receivables.
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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Number of Days Unpaid Customer Total 61-90 91-120 31-60 60.000 1-30 Over 120 $280,000 $40000 $20.000 10.000 MeRLOCo Pasadena Coffee Company Phillips Blender House 14.500 2.000 17,000 26.600 12.400 10,000 1,000 1,00 9.400 6,000 500 211,000 1% 7.000 3.000 4,000 Q-Coffee 1.000 Special Sips Uneasy Isaac's 86,00043.000 Total accounts receivable Bad debt loss rates 21.000 10% | 15% 14,000 30% 375,000 5%