At December 31, 2021, before any year-end adjustments, the Accounts Receivable balance of TM Manufacture, Inc., is $380,000. The Allowance for Uncollectible Accounts has a(n) $25,400 credit balance. TM Manufacture prepares the following aging schedule for Accounts Receivable: (Click the icon to view the aging schedule.) Read the requirements. Requirement 1. Based on the aging of Accounts Receivable, is the unadjusted balance of the allowance account adequate? Too high? Too low? First, calculate a revised allowance for uncollectible accounts amount and the adjusting entry amount. (Round to the nearest dollar.) Allowance for Uncollectible Accounts: Credit balance needed 1-30 31-60 61-90 Over 90 Subtotal Less: Unadjusted balance Adjusting entry amount $ 600 5,500 5,600 20,000 $ 31,700 (25,400) $ 6,300 The credit balance at December 31 in Allowance for Uncollectible Accounts should be Thus, the current balance of the allowance account is too low. $ 31,700. The current balance is Data table Total Balance $380,000 Estimated uncollectible 1-30 Days $150,000 0.4% Print Age of Accounts 31-60 Days 61-90 Days $110,000 $80,000 5.0 % 7.0% Done Over 90 Days $40,000 50.0 %

At December 31, 2021, before any year-end adjustments, the Accounts Receivable balance of TM Manufacture, Inc., is $380,000. The Allowance for Uncollectible Accounts has a(n) $25,400 credit balance. TM Manufacture prepares the following aging schedule for Accounts Receivable: (Click the icon to view the aging schedule.) Read the requirements. Requirement 1. Based on the aging of Accounts Receivable, is the unadjusted balance of the allowance account adequate? Too high? Too low? First, calculate a revised allowance for uncollectible accounts amount and the adjusting entry amount. (Round to the nearest dollar.) Allowance for Uncollectible Accounts: Credit balance needed 1-30 31-60 61-90 Over 90 Subtotal Less: Unadjusted balance Adjusting entry amount $ 600 5,500 5,600 20,000 $ 31,700 (25,400) $ 6,300 The credit balance at December 31 in Allowance for Uncollectible Accounts should be Thus, the current balance of the allowance account is too low. $ 31,700. The current balance is Data table Total Balance $380,000 Estimated uncollectible 1-30 Days $150,000 0.4% Print Age of Accounts 31-60 Days 61-90 Days $110,000 $80,000 5.0 % 7.0% Done Over 90 Days $40,000 50.0 %

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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