An analysis completed by the controller’s office, using the balance sheet approach, indicates that 5% of total accounts receivable is uncollectible. In 2022, the controller estimated bad debts at 5.5% of accounts receivable. (Hint: When the balance sheet approach is used, the unadjusted balance in the Allowance account must be considered in the computation of bad debts expense.) Balance in allowance account- $6120 Accounts Receivable-$284171 What is the adjusting entry?

An analysis completed by the controller’s office, using the balance sheet approach, indicates that 5% of total accounts receivable is uncollectible. In 2022, the controller estimated bad debts at 5.5% of accounts receivable. (Hint: When the balance sheet approach is used, the unadjusted balance in the Allowance account must be considered in the computation of bad debts expense.) Balance in allowance account- $6120 Accounts Receivable-$284171 What is the adjusting entry?

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter6: Cash And Receivables

Section: Chapter Questions

Problem 9E: Estimating Bad Debts from Receivables Balances The following information is extracted from Shelton...

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Sheffield Corp. has accounts receivable of $94,400 at March 31, 2022. Credit terms are 2/10, n/30. At March 31, 2022, there is a $2,115 credit balance in Allowance for Doubtful Accounts prior to adjustment. The company uses the percentage-of-receivables basis for estimating uncollectible accounts. The company's estimates of bad debts are as shown below. Balance, March 31 Estimated Percentage Age of Accounts 2022 2021 Uncollectible Current $64,400 $81,960 2 % 1-30 days past due 13,300 7,240 31-90 days past due 9,100 2,260 30 Over 90 days past due 7,600 1,010 50 $94.400 $92,470 (a) X Your answer is incorrect. Determine the total estimated uncollectibles at March 31 2022. The total estimated uncollectibles 2$ 7240