Below is the aging of receivables schedule for Evers Industries. Aging-of-Receivables Schedule November 30 Customer Balance Not Past Due 1-30 Days Past Due 31-60 Days Past Due 61-90 Days Past Due Over 90 Days Past Due Subtotals 674,900 398,200 148,500 60,700 33,700 33,800 Boyd Industries 17,300 17,300 Hodges Company 18,700 18,700 Kent Creek Inc. 9,300 9,300 Lockwood Company 9,000 9,000 Van Epps Company 25,600 25,600 Totals 754,800 423,800 157,500 70,000 52,400 51,100 Percentage uncollectible 2% 6% 20% 30% 45% Allowance for Doubtful Accounts 70,641 8,476 9,450 14,000 15,720 22,995 Assume that the allowance for doubtful accounts for Evers Industries has a credit balance of $ 14,835 before adjustment on November 30. Journalize the adjusting entry for uncollectible accounts as of November 30.
Bad Debts
At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
Adjustment for Uncollectible Accounts
Below is the aging of receivables schedule for Evers Industries.
| Aging-of-Receivables Schedule November 30 |
||||||
|---|---|---|---|---|---|---|
| Customer | Balance | Not Past Due | 1-30 Days Past Due |
31-60 Days Past Due |
61-90 Days Past Due |
Over 90 Days Past Due |
| Subtotals | 674,900 | 398,200 | 148,500 | 60,700 | 33,700 | 33,800 |
| Boyd Industries | 17,300 | 17,300 | ||||
| Hodges Company | 18,700 | 18,700 | ||||
| Kent Creek Inc. | 9,300 | 9,300 | ||||
| Lockwood Company | 9,000 | 9,000 | ||||
| Van Epps Company | 25,600 | 25,600 | ||||
| Totals | 754,800 | 423,800 | 157,500 | 70,000 | 52,400 | 51,100 |
| Percentage uncollectible | 2% | 6% | 20% | 30% | 45% | |
| Allowance for Doubtful Accounts | 70,641 | 8,476 | 9,450 | 14,000 | 15,720 | 22,995 |
Assume that the allowance for doubtful accounts for Evers Industries has a credit balance of $ 14,835 before adjustment on November 30.
Journalize the
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