Reynolds Company has credit sale of $4,500,000 for the year 2018. At December 31, 2018, the companys
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Question:
Reynolds Company has credit sale of $4,500,000 for the year 2018. At December 31, 2018, the company’s Allowance for Doubtful Accounts has an unadjusted credit balance of $3,400. Reynolds prepares a schedule of its December 31, 2018 accounts receivable by age. On the basis of past experience, it estimates the percent of receivables in each age category that will become uncollectible. This information is summarized as follows:
DECEMBER 31, 2018 | AGE OF | EXPECTED PERCENT | ||
ACCOUNTS RECEIVABLE | ACCOUNTS RECEIVABLE | UNCOLLECTIBLE | ||
$396,400 | NOT YET DUE | 2.00% | ||
277,800 | 1 - 30 DAYS PAST DUE | 4.00% | ||
48,000 | 31-60 DAYS PAST DUE | 8.50% | ||
6,600 | 61-90 DAYS PAST DUE | 39.00% | ||
2,800 | OVER 90 DAYS PAST DUE | 82.00% |
- Determine the ending balance of the Allowance for Doubtful Accounts
- Determine the Bad Debt Expense
- Prepare (in proper order and form) the necessary journal entry to record Bad Debt Expense.
Related Book For
Financial Accounting Information for Decisions
ISBN: 978-1259917042
9th edition
Authors: John J. Wild
Posted Date: