Deley Company prepared the following aging of receivables analysis at December 31. Days Past Due 31 to 60 $ 47,000 78 Accounts receivable Percent uncollectible Total $ 625,000 $ 407,000 38 1 to 30 $ 101,000 Exercise 7-14 (Algo) Aging of receivables method LO P3 49 61 to 90 $ 29,000 Over 90 $ 41,000 129 a. Complete the table below to calculate the estimated balance of Allowance for Doubtful Accounts using aging of accounts receivable. 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 $4,700 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 $1,200 debit.
Deley Company prepared the following aging of receivables analysis at December 31. Days Past Due 31 to 60 $ 47,000 78 Accounts receivable Percent uncollectible Total $ 625,000 $ 407,000 38 1 to 30 $ 101,000 Exercise 7-14 (Algo) Aging of receivables method LO P3 49 61 to 90 $ 29,000 Over 90 $ 41,000 129 a. Complete the table below to calculate the estimated balance of Allowance for Doubtful Accounts using aging of accounts receivable. 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 $4,700 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 $1,200 debit.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Concept explainers
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.
Question
Complete a,b,&c please and thank you
Transcribed Image Text:## Aging of Receivables Method
### Use the following information for the Exercises 14-15 below. (Algo)
#### Background Information
Daley Company prepared the following aging of receivables analysis at December 31:
| Days Past Due | Total | Not Due | 1 to 30 | 31 to 60 | 61 to 90 | Over 90 |
|------------------|-----------|---------|---------|----------|----------|---------|
| Accounts Receivable | $625,000 | $407,000 | $101,000 | $47,000 | $29,000 | $41,000 |
| Percent Uncollectible | | 3% | 6% | 10% | 21% | 12% |
### Exercise 7-14 (Algo): Aging of Receivables Method LO P3
#### Instructions
a. Complete the table below to calculate the estimated balance of Allowance for Doubtful Accounts using aging of accounts receivable.
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 $4,700 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 $1,200 debit.
#### Calculation Table
| Days Past Due | Accounts Receivable | Percent Uncollectible (%) | Estimated Uncollectible |
|---------------|----------------------|---------------------------|-------------------------|
| Not Due | X | X | |
| 1 to 30 | | | |
| 31 to 60 | | | |
| 61 to 90 | | | |
| Over 90 | | | |
**Note**: You need to fill in the values to complete the calculation of the estimated balance of allowance for uncollectibles.
This exercise is designed to help you understand the application of the aging method for estimating doubtful accounts and making necessary adjusting entries.
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