The estimated bad debts rates below are based on ABC's collection experience: Rate (%) Age of Accounts 0- 30 days 31- 60 days 61 – 90 days 91– 120 days Over 120 days 1.0 1.5 3.0 10.0 50.0 The allowance for uncollectible accounts had a debit balance of P5,500 on December 31, 2020 before adjustment. Required: Prepare the necessary adjusting entry. Show solution to support your answer.
The estimated bad debts rates below are based on ABC's collection experience: Rate (%) Age of Accounts 0- 30 days 31- 60 days 61 – 90 days 91– 120 days Over 120 days 1.0 1.5 3.0 10.0 50.0 The allowance for uncollectible accounts had a debit balance of P5,500 on December 31, 2020 before adjustment. Required: Prepare the necessary adjusting entry. Show solution to support your answer.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:ABC Company's accounts receivable subsidiary ledger shows the following information:
Customer
Balance, 12/31/20
Invoice Date
Amount
12/06/20
P 15,000
25,000
12,000
8,500
20,000
10,600
32,000
A
P 40,000
11/29/20
09/27/20
В
20,500
08/20/20
12/08/20
C
30,600
10/25/20
11/17/20
D
45,000
10/09/20
13,000
17,000
15,000
17,500
12/14/20
E
32,000
12/02/20
F
17,500
09/14/20
Transcribed Image Text:The estimated bad debts rates below are based on ABC's collection experience:
Rate (%)
Age of Accounts
0- 30 days
31 - 60 days
61 – 90 days
91– 120 days
1.0
1.5
3.0
10.0
Over 120 days
50.0
The allowance for uncollectible accounts had a debit balance of P5,500 on
December 31, 2020 before adjustment.
Required:
Prepare the necessary adjusting entry. Show solution to support your answer.
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