Gemini Ltd. has accounts receivable of $370,000 at March 31, 2012. An analysis of the accounts shows
Question:
Gemini Ltd. has accounts receivable of $370,000 at March 31, 2012. An analysis of the accounts shows these amounts:
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Credit terms are 2/10, n/30. At March 31, 2012, there is an $8,800 credit balance in the allowance account before adjustment. The company estimates its uncollectible accounts as follows:
Number of Days OutstandingEstimated Percentage Uncollectible
0-30.........................................................................................2%
31-60....................................................................................100%
61-90.......................................................................................30%
Over 90....................................................................................50%
Instructions
(a) Prepare an aging schedule to determine the total estimated uncollectibles at March 31, 2012.
(b) Prepare the adjusting entry at March 31, 2012, to record bad debts expense.
(c) Discuss the implications of the changes in the age of receivables from 2011 to 2012.
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that... Aging Schedule
Aging schedule is an accounting table that shows a company’s account receivables. It is an summarized presentation of accounts receivable into a separate time brackets that the rank received based upon the days due or the days past due. Generally...
Step by Step Answer:
a Age of Accounts Amount Estimated Uncollectible 030 days 260000 2 5200 3160 days 50400 10 504...View the full answer
Financial Accounting Tools for Business Decision Making
ISBN: 978-1118024492
5th Canadian edition
Authors: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso, Barbara Trenholm, Wayne Irvine
