Terranova. uses the balance sheet approach in estimating uncollectible accounts expense. Its Allowance for Doubtful Accounts has
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Question:
Terranova. uses the balance sheet approach in estimating uncollectible accounts expense. Its Allowance for Doubtful Accounts has a €2,000 credit balance prior to adjusting entries. It has just
completed an aging analysis of accounts receivable at 31 December 2020. This analysis disclosed
the following information:
Age Group Total | Percentage Considered Uncollectible | |
Not yet due | $ 200,000 | 1% |
1 – 30 days past due | $ 70,000 | 2% |
31 – 60 past due | $ 10,000 | 17% |
(a) Using the table above, calculate the appropriate balance for Terranova´s Allowance for Doubtful
Accounts at 31 December 2020.
(b) Prepare the year-end adjusting entry for uncollectible accounts.
Date | Account Titles | Debit | Credit |
Related Book For
Financial And Managerial Accounting The Basis For Business Decisions
ISBN: 9781260247930
19th Edition
Authors: Jan Williams, Susan Haka, Mark Bettner, Joseph Carcello
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