**Title: Understanding Aging of Accounts Receivable and Estimating Uncollectible Accounts****Overview:**Pronterra Co., a merchandiser of outdoor gear, uses an aging schedule to manage its accounts receivable. The aging schedule helps estimate the percentage of accounts that may be uncollectible based on how long they have been outstanding.**Accounts Receivable Aging Schedule:**The table below categorizes the company's account balances by age and provides the estimated percentage of uncollectible accounts for each category:| **Age Class** | **Balance** | **Percent Uncollectible** ||--------------------------|-------------|---------------------------|| Not past due | $892,000 | ¾% || 1–30 days past due | $285,000 | 1% || 31–60 days past due | $107,000 | 8% || 61–90 days past due | $63,000 | 16% || 91–180 days past due | $43,100 | 50% || Over 180 days past due | $17,700 | 80% || **Total** | $1,401,800 | |**Tasks for Determination:**a. **Estimate the Allowance for Doubtful Accounts:** - Calculate the total balance of the allowance based on the given uncollectible percentages for each category.b. **Journalize the Adjusting Entry:** - Record the necessary adjusting entry for uncollectible accounts as of December 31, based on the age analysis.**Note:**This aging analysis assists in making informed decisions about credit policies and ensuring accurate financial reporting. Understanding the likelihood of non-payment allows companies to manage risk effectively and maintain healthy cash flow.---For further guidance on calculating and journalizing adjustments, students can refer to accounting textbook examples or contact their instructors.

When customers turn out to be uncollectible, it is called bad debts which is an expense for the…

Prontera Co. is a merchandiser of outdoors gear. An aging of the company's accounts receivable on December 31 and a historical analysis of the percentage of uncollectible accounts in each age category are as follows:

Prontera Co. is a merchandiser of outdoors gear. An aging of the company's accounts receivable on December 31 and a historical analysis of the percentage of uncollectible accounts in each age category are as follows:

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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