Outback Company has Accounts receivable of $98,100 as at 31 March. An analysis of the accounts...

 

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Outback Company has Accounts receivable of $98,100 as at 31 March. An analysis of the accounts shows the following. Month of sale March February January Prior to January Balance 31 March $65,000 17,600 8,500 7,000 $98,100 Credit terms are 2/10, n/30. As at 31 March Allowance for Doubtful debts has a credit balance of $1,200 prior to adjustment. The business uses the percentage of receivables basis for estimating uncollectable accounts. The business's estimate of doubtful debts is as follows. Age of accounts Estimated percentage uncollectable 1-30 days 30-60 days 60-90 days Over 90 days Required (a) Determine the total estimated uncollectables. Age of accounts 1-30 days 30-60 days 60-90 days Over 90 days Date Mar. 31 2.0% 5.0% 30.0% 50.0% Amount $65,000 % 2.0 5.0 30.0 50.0 $ Estimated uncollectable $1,300 (b) Prepare the adjusting entry as at 31 March to record bad debts expense. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Account Debit Credit Outback Company has Accounts receivable of $98,100 as at 31 March. An analysis of the accounts shows the following. Month of sale March February January Prior to January Balance 31 March $65,000 17,600 8,500 7,000 $98,100 Credit terms are 2/10, n/30. As at 31 March Allowance for Doubtful debts has a credit balance of $1,200 prior to adjustment. The business uses the percentage of receivables basis for estimating uncollectable accounts. The business's estimate of doubtful debts is as follows. Age of accounts Estimated percentage uncollectable 1-30 days 30-60 days 60-90 days Over 90 days Required (a) Determine the total estimated uncollectables. Age of accounts 1-30 days 30-60 days 60-90 days Over 90 days Date Mar. 31 2.0% 5.0% 30.0% 50.0% Amount $65,000 % 2.0 5.0 30.0 50.0 $ Estimated uncollectable $1,300 (b) Prepare the adjusting entry as at 31 March to record bad debts expense. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Account Debit Credit

Answer rating: 100% (QA)

RequirementA Age of Accounts 130 days 3060 days 6090 days Over 9... View the full answer