Young and Old Corporation (YOC) uses two aging categories to estimate uncollectible accounts.Accounts less than 60 days are considered young and have a 5% uncollectible rate. Accounts morethan 60 days are considered old and have a 40% uncollectible rate.Required:1. If YOC has $100,000 of young accounts and $400,000 of old accounts, how much should bereported in the Allowance for Doubtful Accounts?2. If YOC’s Allowance for Doubtful Accounts currently has an unadjusted credit balance of$40,000, how much should be credited to the account?3. If YOC’s Allowance for Doubtful Accounts has an unadjusted debit balance of $5,000, howmuch should be credited to the account?4. Explain how YOC’s Allowance for Doubtful Accounts could have a debit balance
Young and Old Corporation (YOC) uses two aging categories to estimate uncollectible accounts.
Accounts less than 60 days are considered young and have a 5% uncollectible rate. Accounts more
than 60 days are considered old and have a 40% uncollectible rate.
Required:
1. If YOC has $100,000 of young accounts and $400,000 of old accounts, how much should be
reported in the Allowance for Doubtful Accounts?
2. If YOC’s Allowance for Doubtful Accounts currently has an unadjusted credit balance of
$40,000, how much should be credited to the account?
3. If YOC’s Allowance for Doubtful Accounts has an unadjusted debit balance of $5,000, how
much should be credited to the account?
4. Explain how YOC’s Allowance for Doubtful Accounts could have a debit balance
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