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 $ 840,000 Not yet due 1.35 % 336,000 1 to 30 days past due 2.10 67,200 31 to 60 days past due 6.60 33,600 61 to 90 days past due 33.25 13,440 Over 90 days past due 69.00 Required: 1. Compute the required balance of the Allowance for Doubtful Accounts at December 31.

Answer 1

Answer:

Allowance for Doubtful Accounts $ 28776.8

Explanation:

Jarden Co

December 31, Jarden Co.'s Allowance for Doubtful Accounts  $14,500 Cr

               Accounts          Age of  A/R              Expected    Uncollectible

               Receivable                                           Percent  

                   $ 840,000               Not yet due            1.35 %      11340

                    336,000       1 to 30 days past due        2.10         7056

                    67,200          31 to 60 days past due     6.60        4435.2

                   33,600           61 to 90 days past due     33.25      11172

                 13,440            Over 90 days past due        69.00    9273.6

Total                                                                                           43276.8

Un adjusted Balance  $14,500 Cr

Estimated Balance    $43276.8 Cr

Required Adjustment  $ 28776.8

This yields the following entry

Bad Debts $ 28776.8 Dr

Allowance for Doubtful Accounts $ 28776.8 Cr