The schedule of accounts receivable by age shown on the following page was prepared for the Lucero

Question:

The schedule of accounts receivable by age shown on the following page was prepared for the Lucero Company at the end of the firm's fiscal year on December 31, 2016:

LUCERO COMPANY

Schedule of Accounts Receivable by Age

December 31, 2016

Instructions
1. Compute the estimated uncollectible accounts at the end of the year using the following rates:
Current ................................ 2%
1-30 days past due .................. 4%
31-60 days past due ............... 10%
Over 60 days past due ............ 30%
2. As of December 31, 2016, there is a credit balance of $308 in Allowance for Doubtful Accounts. Compute the amount of the adjustment for uncollectible accounts expense that must be made as part of the adjusting entries. 3. In general journal form, record the adjustment for the estimated losses. Use Uncollectible Accounts Expense and Allowance for Doubtful Accounts. 4. On May 10, 2017 the$516 account receivable of John Ash was recognized as uncollectible.
Record this entry.
5. On June 12, 2017, a check for $300 was received from Zeke Martin to apply to his account, which had been written off on November 8, 2016, as uncollectible. Record the reversal of the previous write-off in the general journal. The cash obtained has already been entered in the cash receipts journal. 6. Suppose that instead of aging the accounts receivable, the company estimated the uncollectible accounts to be 2 percent of the total accounts receivable on December 31, 2016. Give the general journal entry to record the adjustment for estimated losses from uncollectible accounts. Assume that Allowance for Doubtful Accounts has a credit balance of$308 before the adjusting entry.
Analyze: What impact would the change in estimation method described in Instruction 6 have on the net income for fiscal 2016?

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...
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