Question 3
Provincial Limited had a beginning balance of $3,200 credit balance in Allowance for Doubtful accounts at December 31, 2024. An aging of the accounts receivable revealed the following:
	Accounts Receivable	Estimated Percentage	Estimated uncollectible amount
Uncollectible
Current	$600,000	1%
1-30 days past due	60,000	3%
31-60 days past due	32,000	6%
61-90 days past due	20,000	12%
Over 90 days past due	24,000	30%
Total accounts receivable	$736,000
Required:
a) Calculate the total estimated uncollectible amount by completing the aging schedule above (2 marks).
b) Prepare the adjusting entry at December 31, 2024, to recognize allowance for doubtful debts (1 mark).
c) Assume the same facts except that the Allowance for Doubtful account had an opening debit balance of $3,200. Prepare the adjusting entry for the current year's allowance for doubtful debt (1 mark).

 

Question 4
The following information is available from the financial statements of Amamco Corp. and Brindle Corp.:
	(in millions)
	Amamco Corp.	Brindle Corp.
Credit Sales	$45,000	$25,000
Beginning receivables, gross	22,000	3,500
Ending receivables, gross	17,500	4,000
a) Calculate the following for each company:
	Amamco Corp. (2 marks)	Brindle Corp. (2 marks)
Receivables Turnover
(keep to 1 decimal place)
Average Collection Period
(round to up the nearest whole number)
b) Which company appears to have a better management of accounts receivable? Why?