Daley Company prepared the following aging of receivables analysis at December 31. Days Past Due 31 to 60 $ 42,000 Accounts receivable Percent uncollectible Total $ 600,000 0 $ 402,000 Req A 1% Req B and C 1 to 30 $ 96,000 Complete this question by entering your answers in the tabs below. 2% 5% 61 to 90 Exercise 7-15 (Algo) Percent of receivables method LO P3 a. Estimate the balance of the Allowance for Doubtful Accounts assuming the company uses 6% of total accounts receivable to estimate uncollectibles, instead of the aging of receivables method. b. Prepare the adjusting entry to record bad debts expense using the estimate from part a. Assume the unadjusted balance in the Allowance for Doubtful Accounts is a $12,600 credit. $ 24,000 7% c. Prepare the adjusting entry to record bad debts expense using the estimate from part a. Assume the unadjusted balance in the Allowance for Doubtful Accounts is a $1,600 debit. Over 90 $ 36,000 10% Estimate the balance of the Allowance for Doubtful Accounts assuming the company uses 6% of total accounts receivable to estimate uncollectibles, instead of the aging of receivables method. Estimated balance of allowance for uncollectibles

FINANCIAL ACCOUNTING
10th Edition
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Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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**Aging of Receivables Analysis**

Daley Company prepared the following aging of receivables analysis at December 31.

| Days Past Due | Total     | 0       | 1 to 30  | 31 to 60 | 61 to 90 | Over 90 |
|---------------|-----------|---------|----------|----------|----------|---------|
| Accounts Receivable | $600,000 | $420,000 | $96,000  | $42,000  | $24,000  | $36,000 |
| Percent Uncollectible |           | 1%      | 2%       | 5%       | 7%       | 10%     |

**Exercise 7-15 (Algo) Percent of Receivables Method LO P3**

1. **Estimate the balance of the Allowance for Doubtful Accounts**, assuming the company uses 6% of total accounts receivable to estimate uncollectibles, instead of the aging of receivables method.

2. **Prepare the adjusting entry to record bad debts expense** using the estimate from part a. Assume the unadjusted balance in the Allowance for Doubtful Accounts is a $12,600 credit.

3. **Prepare the adjusting entry to record bad debts expense** using the estimate from part a. Assume the unadjusted balance in the Allowance for Doubtful Accounts is a $1,600 debit.

**Instructions**

- Complete this question by entering your answers in the tabs below.

**Tabs: Req A | Req B and C**

**Req A:** Estimate the balance of the Allowance for Doubtful Accounts assuming the company uses 6% of total accounts receivable to estimate uncollectibles, instead of the aging of receivables method.

**Input Box:** Estimated balance of allowance for uncollectibles __________
Transcribed Image Text:**Aging of Receivables Analysis** Daley Company prepared the following aging of receivables analysis at December 31. | Days Past Due | Total | 0 | 1 to 30 | 31 to 60 | 61 to 90 | Over 90 | |---------------|-----------|---------|----------|----------|----------|---------| | Accounts Receivable | $600,000 | $420,000 | $96,000 | $42,000 | $24,000 | $36,000 | | Percent Uncollectible | | 1% | 2% | 5% | 7% | 10% | **Exercise 7-15 (Algo) Percent of Receivables Method LO P3** 1. **Estimate the balance of the Allowance for Doubtful Accounts**, assuming the company uses 6% of total accounts receivable to estimate uncollectibles, instead of the aging of receivables method. 2. **Prepare the adjusting entry to record bad debts expense** using the estimate from part a. Assume the unadjusted balance in the Allowance for Doubtful Accounts is a $12,600 credit. 3. **Prepare the adjusting entry to record bad debts expense** using the estimate from part a. Assume the unadjusted balance in the Allowance for Doubtful Accounts is a $1,600 debit. **Instructions** - Complete this question by entering your answers in the tabs below. **Tabs: Req A | Req B and C** **Req A:** Estimate the balance of the Allowance for Doubtful Accounts assuming the company uses 6% of total accounts receivable to estimate uncollectibles, instead of the aging of receivables method. **Input Box:** Estimated balance of allowance for uncollectibles __________
**Instructions for Adjusting Journal Entries on Bad Debts**

**b.** Prepare the adjusting entry to record bad debts expense using the estimate from part a. Assume the unadjusted balance in the Allowance for Doubtful Accounts is a $12,600 credit.

**c.** Prepare the adjusting entry to record bad debts expense using the estimate from part a. Assume the unadjusted balance in the Allowance for Doubtful Accounts is a $1,600 debit.

---

**Journal Entry Worksheet**

- **Tab 1**:
  - Instruction: Record estimated bad debts assuming that Allowance for Doubtful Accounts has a $12,600 credit balance.
  - **Note:** Enter debits before credits.

  | Date       | General Journal         | Debit | Credit |
  |------------|-------------------------|-------|--------|
  | December 31|                         |       |        |
  |            |                         |       |        |
  |            |                         |       |        |
  |            |                         |       |        |

This worksheet assists in recording adjusting entries for bad debts, focusing on the correct handling of debit and credit entries for accounting purposes.
Transcribed Image Text:**Instructions for Adjusting Journal Entries on Bad Debts** **b.** Prepare the adjusting entry to record bad debts expense using the estimate from part a. Assume the unadjusted balance in the Allowance for Doubtful Accounts is a $12,600 credit. **c.** Prepare the adjusting entry to record bad debts expense using the estimate from part a. Assume the unadjusted balance in the Allowance for Doubtful Accounts is a $1,600 debit. --- **Journal Entry Worksheet** - **Tab 1**: - Instruction: Record estimated bad debts assuming that Allowance for Doubtful Accounts has a $12,600 credit balance. - **Note:** Enter debits before credits. | Date | General Journal | Debit | Credit | |------------|-------------------------|-------|--------| | December 31| | | | | | | | | | | | | | | | | | | This worksheet assists in recording adjusting entries for bad debts, focusing on the correct handling of debit and credit entries for accounting purposes.
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