Entry for Uncollectible Accounts Easy Rider International is a wholesaler of motorcycle supplies. An aging of the
Question:
Entry for Uncollectible Accounts
Easy Rider International is a wholesaler of motorcycle supplies. An aging of the company's accounts receivable on December 31, 20Y3, and a historical analysis of the percentage of uncollectible accounts in each age category are as follows:
Age Interval Balance Percent Uncollectible
Not past due $1,850,000 1%
1–30 days past due 750,000 2
31–60 days past due 100,000 6
61–90 days past due 60,000 14
91–180 days past due 45,000 60
Over 180 days past due 25,000 90
$2,830,000
Assume that the allowance for doubtful accounts for Easy Rider International had a negative balance of $(13,300) as of December 31, 20Y3.
Illustrate the effects of the adjustment for uncollectible accounts as of December 31, 20Y3, on the accounts and financial statements.
If no account or activity is affected, select "No effect" from the dropdown list and leave the corresponding number entry box blank. Enter account decreases and cash outflows as negative amounts.
Balance Sheet:
Statement of cash flows Assets = Liabilites + stockholders equity
Allowance for doubtful accounts + no effect = No effect + Retained earnings
Dec. 31 ______________________________________ 0 = 0 +__________________________________
Statemet of cash flows Bad Debt Expense ___________
No Effect 0
Expert Answer:
To illustrate the effects of the adjustment for uncollectible accounts as of December 31 20Y3 on the accounts and financial statements we need to calculate the necessary adjustments based on the aging ... View the full answer
