Rainy Day Company, a wholesaler, uses the aging method to estimate bad debt losses The following schedule of aged accounts receivable was prepared at December 31, 2011 Age of Accounts Amount 030 days $478,600 3160 days 172,300 6190 days 79,200 91120 days 21,300 Over 120 days 8,300 $759,700 The foll...

Uncollectible Loss Percentage Over 120 Year 030 Days 3160 Da ...

Rainy Day Company, a wholesaler, uses the aging method to estimate bad debt losses. The following schedule

Question:

Rainy Day Company, a wholesaler, uses the aging method to estimate bad debt losses. The following schedule of aged was prepared at December 31, 2011.
Age of Accounts Amount
0€“30 days . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $478,600
31€“60 days . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 172,300
61€“90 days . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79,200
91€“120 days . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21,300
Over 120 days . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,300
$759,700
The following schedule shows the year-end receivables balances and uncollectible accounts experience for the previous five years.

The unadjusted Allowance for Bad Debts balance on December 31, 2011, is $30,124. Instructions: Compute the correct balance for the allowance account based on the average loss experience for the last five years and prepare the appropriate end-of-year adjustingentry.

Accounts Receivable
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...