Menge Company has accounts receivable of $93,100 at March 31. Credit terms are 2/10, n/30....
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Menge Company has accounts receivable of $93,100 at March 31. Credit terms are 2/10, n/30. At March 31, Allowance for Doubtful Accounts has a credit balance of $1,200 prior to adjustment. The company uses the percentage-of-receivables basis for estimate uncollectible accounts. The companys estimate of bad debts is shown below. (4 points)
Estimated Percentage
Age of Accounts Balance, March 31 Uncollectible
130 days $60,000 2 %
3160 days 17,600 5 %
6190 days 8,500 20 %
Over 90 days 7,000 50 %
$93,100
Instructions
(a) Determine the total estimated uncollectible.
(b) Prepare the adjusting entry at March 31 to record bad debt expense.
Menge Company has accounts receivable of $93,100 at March 31. Credit terms are 2/10, n/30. At March 31, Allowance for Doubtful Accounts has a credit balance of $1,200 prior to adjustment. The company uses the percentage-of-receivables basis for estimate uncollectible accounts. The companys estimate of bad debts is shown below. (4 points)
Estimated Percentage
Age of Accounts Balance, March 31 Uncollectible
130 days $60,000 2 %
3160 days 17,600 5 %
6190 days 8,500 20 %
Over 90 days 7,000 50 %
$93,100
Instructions
(a) Determine the total estimated uncollectible.
(b) Prepare the adjusting entry at March 31 to record bad debt expense.
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