Sheffield Corporation operates in an industry that has a high rate of bad debts. Before any year-end adjustments, the balance in Sheffield's Accounts Receivable account was $593,900 and Allowance for Doubtful Accounts had a credit balance of $40,480. The year-end balance reported in the balance sheet for Allowance for Doubtful Accounts will be based on the aging schedule shown below. Probability of Days Account Outstanding Amount Collection Less than 16 days $314,700 0.98 Between 16 and 30 days 118,900 0.90 Between 31 and 45 days 82,800 0.86 Between 46 and 60 days 43,900 0.79 Between 61 and 75 days 18,200 0.52 Over 75 days (to be written off) 15,400 0.00 (a) What is the appropriate balance for Allowance for Doubtful Accounts at year-end? Balance for allowance for doubtful accounts $
Sheffield Corporation operates in an industry that has a high rate of bad debts. Before any year-end adjustments, the balance in Sheffield's Accounts Receivable account was $593,900 and Allowance for Doubtful Accounts had a credit balance of $40,480. The year-end balance reported in the balance sheet for Allowance for Doubtful Accounts will be based on the aging schedule shown below. Probability of Days Account Outstanding Amount Collection Less than 16 days $314,700 0.98 Between 16 and 30 days 118,900 0.90 Between 31 and 45 days 82,800 0.86 Between 46 and 60 days 43,900 0.79 Between 61 and 75 days 18,200 0.52 Over 75 days (to be written off) 15,400 0.00 (a) What is the appropriate balance for Allowance for Doubtful Accounts at year-end? Balance for allowance for doubtful accounts $
College Accounting, Chapters 1-27
23rd Edition
ISBN:9781337794756
Author:HEINTZ, James A.
Publisher:HEINTZ, James A.
Chapter16: Accounting For Accounts Receivable
Section: Chapter Questions
Problem 3CP: At the end of 20-3, Martel Co. had 410,000 in Accounts Receivable and a credit balance of 300 in...
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Transcribed Image Text:Sheffield Corporation operates in an industry that has a high rate of bad debts. Before any year-end adjustments, the balance in
Sheffield's Accounts Receivable account was $593,900 and Allowance for Doubtful Accounts had a credit balance of $40,480. The
year-end balance reported in the balance sheet for Allowance for Doubtful Accounts will be based on the aging schedule shown
below.
Probability of
Days Account Outstanding
Amount
Collection
Less than 16 days
$314,700
0.98
Between 16 and 30 days
118,900
0.90
Between 31 and 45 days
82,800
0.86
Between 46 and 60 days
43,900
0.79
Between 61 and 75 days
18,200
0.52
Over 75 days (to be written off)
15,400
0.00
(a)
What is the appropriate balance for Allowance for Doubtful Accounts at year-end?
Balance for allowance for doubtful accounts $
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