Smoot Companys accounts receivable reveal the following balances: Age of Accounts Receivable Balance Current . . .
Question:
Smoot Company’s accounts receivable reveal the following balances:
Age of Accounts Receivable Balance
Current . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $720,000
1–30 days past due . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 395,000
31–60 days past due . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105,000
61–90 days past due . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52,000
91–120 days past due . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,000
The credit balance in Allowance for Bad Debts is now $42,000. After a thorough analysis of its collection history, the company estimates that the following percentages of receivables will eventually prove uncollectible:
Current . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.5%
1–30 days past due . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.0
31–60 days past due . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.0
61–90 days past due . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52.5
91–120 days past due . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92.0
Prepare an aging schedule for the accounts receivable, and give the journal entry for recording the necessary change in the allowance for bad debts account.
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:
05 x 720000 3600 30 x 395000 11850 160 x 105000 16800 525 x 52000 27300 920 x 13000 11960 71...View the full answer
Accounting concepts and applications
ISBN: 978-0538745482
11th Edition
Authors: Albrecht Stice, Stice Swain
