Question

Stine Company has accounts receivable of $95,400 at March 31, 2014. An analysis of the accounts shows these amounts.


Credit terms are 2/10, n/30. At March 31, 2014, there is a $2,100 credit balance in Allowance for Doubtful Accounts prior to adjustment. The company uses the percentage-of receivables basis for estimating uncollectible accounts. The company’s estimates of bad debts are as shown below.
Estimated Percentage
Age of Accounts Uncollectible
Current.............. 2%
1–30 days past due........... 5
31–90 days past due......... 30
Over 90 days past due........ 50

Instructions
(a) Determine the total estimated uncollectibles.
(b) Prepare the adjusting entry at March 31, 2014, to record bad debt expense.
(c) Discuss the implications of the changes in the aging schedule from 2013 to2014.


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  • CreatedApril 07, 2014
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