On April 1, ABC has an Accounts Receivable balance of $190,000. During the month, credit sales total $210,000. As a result of collections efforts, the aging of Accounts Receivable is as follows for April 30: Current $100,000 (1% is estimated
On April 1, ABC has an Accounts Receivable balance of $190,000. During the month, credit sales total $210,000. As a result of collections efforts, the aging of Accounts Receivable is as follows for April 30: Current $100,000 (1% is estimated
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:On April 1, ABC has an Accounts Receivable balance of $190,000. During the month, credit sales total $210,000. As a
result of collections efforts, the aging of Accounts Receivable is as follows for April 30: Current $100,000 (1% is estimated
to be uncollectible) 0-30 Days Past Due $50,000 (5% is estimated to be uncollectible) 31-60 Days Past Due $
20,000 (10% is estimated to be uncollectible) 31-90 Days Past Due $10,000 (20% is estimated to be uncollectible) > 90
Days Past Due $20,000 (50% is estimated to be uncollectible) Balance in Allowance for Doubtful Accounts (prior to any
April 30 entry) $5,000 Credit If ABC is using the % of sales method of estimating its bad debts, what is the journal entry
made at the end of the month if the estimated % of sales that are uncollectible is 4% ?
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