Question

Artis, Inc. uses the aging of accounts receivable method for estimating uncollectible accounts. As of October 31, total Accounts Receivable was $17,800 of which $8,400 was 0 - 30 days old; $5,900 was 31 - 60 days old; and the remainder was over 60 days old. Artis estimates 1% of accounts 0 - 30 days old will be uncollectible; 5% of accounts 31 - 60 days old will be uncollectible; and 15% of accounts over 60 days old will be uncollectible. How much is the adjustment for uncollectible accounts assuming the Allowance for Doubtful Accounts has a $610 credit balance

Answer 1

	Amount	% of uncollectibe	Uncollectible amount
Less than 30 days	$ 8,400	1%	$                                    84
31-60 days	$ 5,900	5%	$                                  295
More than 60 days	$ 3,500	15%	$                                  525
Allowance for doubtful accounts ending balance			$                                  904

Allowance for doubtful accounts ending balance	$   904
Less:Allowance for doubtful account beg. Balance	$ (610)
Adjustment for uncollectible account	$   294

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