Question

On December 31, Jarden Co.'s Allowance for Doubtful Accounts has an unadjusted credit balance of $14,500. Jarden prepares a schedule of its December 31 accounts receivable by age. Accounts Receivable Age of Accounts Receivable Expected Percent Uncollectible $ 860,000 Not yet due 1.25 % 344,000 1 to 30 days past due 2.00 68,800 31 to 60 days past due 6.50 34,400 61 to 90 days past due 32.75 13,760 Over 90 days past due 68.00

Answer 1

Answer:

The correct answer is $42,724.8.

Explanation:

According to the scenario, the computation of the given data are as follows:

Uncollectable Amt. = Receivable Amt × Uncollectable Percentage

Time         Receivable amt.     Uncollectable %  Uncollectable  Amt.

Not yet due         $860,000                1.25%                    $10,750

1 - 30 days      $344,000                2.00%                    $6,880

31 - 60 days      $68,800                6.50%                    $4,472

61 - 90 days      $34,400                32.75%                    $11,266

Over 90 days      $13,760                68.00%                    $9,356.8

Total                                                                             $42,724.8

So, Required balance of the allowance for doubtful accounts at Dec.31 is $42,724.8