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Estimating Uncollectible Accounts and Reporting Accounts Receivable
Collins Company analyzes its accounts receivable at December 31, and arrives at the aged categories below along with the percentages that are estimated as uncollectible.
|
Age Group |
Accounts Receivable |
Estimated Loss % |
|---|---|---|
| 0-30 days past due | $110,000 | 1% |
| 31-60 days past due | 40,000 | 2 |
| 61-120 days past due | 27,000 | 5 |
| 121-180 days past due | 14,000 | 10 |
| Over 180 days past due | 9,000 | 25 |
| Total accounts receivable | $200,000 |
The balance of the allowance for uncollectible accounts is $1,100 on December 31, before any adjustments.
(a) What amount of bad debts expense will Collins report in its income statement for the year?
$Answer?
(b) Use the financial statement effects template to record Collin's bad debts expense for the year.
Use negative signs with your answers, when appropriate.
|
Balance Sheet
|
||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Transaction | Cash Asset | + |
Noncash Assets |
= | Liabilities | + |
Contributed Capital |
+ |
Earned Capital |
|
| Record bad debts expense | Answer
|
Answer
|
Answer
|
Answer
|
Answer
|
|
Income Statement
|
||||
|---|---|---|---|---|
Revenue |
- |
Expenses |
= |
Net Income |
| Answer
|
Answer
|
Answer
|
(c) What is the balance of accounts receivable on it December 31 balance sheet?
$Answer?
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