Banks Corporation estimates its annual provision for uncollectible accounts by analyzing the aged schedule of accounts receivable.
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Banks Corporation estimates its annual provision for uncollectible accounts by analyzing the aged schedule of accounts receivable.
It is common industry practice to estimate an allowance for uncollectible accounts based on the following rules:
Aging Category Allowance Provided
Current …………………………… 2%
1– 30 Days Past Due……………… 7%
31– 60Days Past Due……………… 20%
61– 90 Days Past Due……………… 40%
Over90Days Past Due……………… 100%
Prepare the journal entry to record the provision for bad debts assuming that the existing credit balance in the allowance for doubtful accounts is equal to $ 23,108.
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Related Book For
Intermediate Accounting
ISBN: 978-0132162302
1st edition
Authors: Elizabeth A. Gordon, Jana S. Raedy, Alexander J. Sannella
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