F11 H A 1 (L03) Bad-Debt Reporting---Aging (CMA Adapted) 2 Jamison Corporation operates in an industry that has a high rate of bad debts. Before any year- 3 end adjustments, the balance in Jamison's Accounts Receivable account was $556,000 and Allowance for Doubtful Accounts had a dedit balance of $40,000. The year-end balance reported s in the balance sheet for Alowance for Doubtful Accounts will be based on the aging schedule shown below 6 7 Probability of Days Account Outstanding Amount Collection Less than 16 days $ 300,000 0.98 Between 16 and 30 days 100,000 0.92 Between 31 and 45 days B0,000 0.86 Between 46 and 60 days 40,000 0.82 1 Between 61 and 75 days 20,000 0.57 14 Over 75 days (to be written off) 15,000 0 16 Instructions 17 (a) What is the appropriate balance for Allowance for Doubtful Accounts at year-end? 10 Expected .0 14 Over 75 days (to be written off) 15,000 15 16 Instructions 17 (a) What is the appropriate balance for Allowance for Doubtful Accounts at year-end? 18 Expected Percentage Estimated 19 Days Account Outstanding Amount Uncollectible Uncollectible 20 21 22 23 24 25 26 27 28 29 (b) Show how accounts receivable would be presented on the balance sheet. 30 EX 1 Pr 1 GAN86 FIT - G E 28 29 (b) Show how accounts receivable would be presented on the balance sheet. 30 31 32 33 34 35 36 37 (c) What is the dollar effect of the year-end bad debt adjustment on the before-tax income? 38 39 40 41 42 43 14 45 46