In: Accounting
a. The aging of Torme Designs' accounts receivable is shown below. Calculate the amount of each periodicity range that is deemed to be uncollectible. If required, round your answers to two decimal places.
Estimated Uncollectible Accts | |||
Age Interval | Balance | Percentage | Amount |
Not past due | $850,000 | 3.50% | $ |
1-30 days past due | 47,500 | 5.00 | |
31-60 days past due | 21,750 | 10.00 | |
61-90 days past due | 11,250 | 20.00 | |
91-180 days past due | 5,065 | 30.00 | |
181-365 days past due | 2,500 | 50.00 | |
Over 365 days past due | 1,145 | 95.00 | |
Total | $939,210 | $ |
b. If Allowance for Doubtful Accounts has a credit balance of $1,135.00, record the adjusting entry for the bad debt expense for the year. Round your answers to two decimal places.
Dec. 31 | |||
a.)
Amt. in $ | |||
Age Interval | Estimated Uncollectible Accts Balance (A) | Percentage (B) | Uncollectible amount (A*B) |
Not past due | 8,50,000 | 3.50% | 29,750.00 |
1-30 days past due | 47,500 | 5.00% | 2,375.00 |
31-60 days past due | 21,750 | 10.00% | 2,175.00 |
61-90 days past due | 11,250 | 20.00% | 2,250.00 |
91-180 days past due | 5,065 | 30.00% | 1,519.50 |
181-365 days past due | 2,500 | 50.00% | 1,250.00 |
Over 365 days past due | 1,145 | 95.00% | 1,087.75 |
Total | 9,39,210 | 40,407.25 |
b.) Adjusting entry for recording the bad debt expense for the year:-
Bad debt expense A/c........Dr. 39272.25 (40407.25-1135)
To Allowance for doubtful debt A/c 39272.25
(Being bad debt expense recorded for the year)