Miller Equipment Ltd. supplies cooking equipment to restaurants throughout Canada. The accounts receivable clerk for Miller Equipment Ltd. prepared the following partially shown aging of receivables schedule as at the end of business on December 31, 2015:

Miller Equipment Ltd. has a past history of uncollectible accounts by age category, as follows:

Age Class Percent Uncollectible
Not past due ..............2%
1€“30 days past due ............ 5
31€“60 days past due ..........12
61€“90 days past due ..........15
Over 90 days past due .........50
Instructions
1. Estimate the allowance for doubtful accounts, based on the aging of receivables schedule.
2. Assume that the allowance for doubtful accounts for Miller Equipment Ltd. has a credit balance of $1,710 before adjustment on December 31, 2015. Journalize the adjustment for uncollectible accounts.
3. Determine the net realizable value of accounts receivable as at December 31, 2015.

Transcribed Image Text:

Not Past Balance Due Days Past Due 2 3 Customer 4 Alice's Restaurant 20,000 20,000 5 Dell Restaurant Over 61-90 90 1-3031-60 11,000 11.000 21 Zeus Grill 22 Totals 2,900 900,010 498,600 217260 98,75033,300 52,100