Problem 9-3A Aging accounts receivable and accounting for bad debts LO P2, P3 ...
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Accounting
Problem 9-3A Aging accounts receivable and accounting for bad debts LO P2, P3
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Jarden Company has credit sales of $2,300,000 for year 2017. On December 31, 2017, the companys Allowance for Doubtful Accounts has an unadjusted credit balance of $17,670. Jarden prepares a schedule of its December 31, 2017, accounts receivable by age. On the basis of past experience, it estimates the percent of receivables in each age category that will become uncollectible. This information is summarized here.
December 31, 2017 Accounts Receivable
Age of Accounts Receivable
Expected Percent Uncollectible
$
460,000
Not yet due
1.45
%
184,000
1 to 30 days past due
2.20
36,800
31 to 60 days past due
6.70
18,400
61 to 90 days past due
33.75
3,680
Over 90 days past due
70.00
Problem 9-3A Part 1
Required:1. Estimate the required balance of the Allowance for Doubtful Accounts at December 31, 2017, using the aging of accounts receivable method.
Problem 9-3A Part 2
2. Prepare the adjusting entry to record bad debts expense at December 31, 2017.
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