Estimating allowance for doubtful accounts Devers Company has the following balances in their accounts receivable account and allowance for doubtful accounts at the end of the period ending September 30, 2021. Accounts Receviable Allow. for Doubtful Accts 505,000 3,000 Devers has a past history of uncollectible accounts as shown below: Accounts Receivable Age Class Percentage Uncollectible $275,000 1-30 days 0.50% $100,000 31-60 days 2.00% $ 60,000 61-90 days 7.00% $ 50,000 91-120 days 18.00% $ 20,000 > 120 days 60.00% Required 1. Estimate the amount that should be in the Allowance for Doubtful Accounts based on the aging of the accounts receivable schedule above Enter the amount here ==========> - 2. Journalize the necessary entry to record the bad debt expense for September 30. Date Accounts and Explanations Debit Credit
Estimating allowance for doubtful accounts Devers Company has the following balances in their accounts receivable account and allowance for doubtful accounts at the end of the period ending September 30, 2021. Accounts Receviable Allow. for Doubtful Accts 505,000 3,000 Devers has a past history of uncollectible accounts as shown below: Accounts Receivable Age Class Percentage Uncollectible $275,000 1-30 days 0.50% $100,000 31-60 days 2.00% $ 60,000 61-90 days 7.00% $ 50,000 91-120 days 18.00% $ 20,000 > 120 days 60.00% Required 1. Estimate the amount that should be in the Allowance for Doubtful Accounts based on the aging of the accounts receivable schedule above Enter the amount here ==========> - 2. Journalize the necessary entry to record the bad debt expense for September 30. Date Accounts and Explanations Debit Credit
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
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
| Estimating allowance for doubtful accounts | |||||||
| Devers Company has the following balances in their |
|||||||
| and allowance for doubtful accounts at the end of the period ending September 30, 2021. | |||||||
| Accounts Receviable | Allow. for Doubtful Accts | ||||||
| 505,000 | 3,000 | ||||||
| Devers has a past history of uncollectible accounts as shown below: | |||||||
| Accounts Receivable | Age Class | Percentage Uncollectible | |||||
| $275,000 | 1-30 days | 0.50% | |||||
| $100,000 | 31-60 days | 2.00% | |||||
| $ 60,000 | 61-90 days | 7.00% | |||||
| $ 50,000 | 91-120 days | 18.00% | |||||
| $ 20,000 | > 120 days | 60.00% | |||||
| Required | |||||||
| 1. Estimate the amount that should be in the Allowance for Doubtful Accounts | |||||||
| based on the aging of the accounts receivable schedule above | |||||||
| Enter the amount here ==========> | - | ||||||
| 2. Journalize the necessary entry to record the |
|||||||
| Date | Accounts and Explanations | Debit | Credit | ||||
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 3 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education