Question

Crane Company has accounts receivable of $96,600 at March 31, 2022. Credit terms are 2/10, n/30. At March 31, 2022, there is a $2,287 credit balance in Allowance for Doubtful Accounts prior to adjustment. The company uses the percentage-of-receivables basis for estimating uncollectible accounts. The company’s estimates of bad debts are as shown below. Balance, March 31 Estimated Percentage UncollectibleAge of Accounts 2022 2021Current $65,600 $75,150 2%1–30 days past due 13,500 7,870 5 31–90 days past due 9,800 2,630 28 Over 90 days past due 7,700 1,140 47 $96,600 $86,790Determine the total estimated uncollectibles at March 31, 2022.Total estimated uncollectibles $Enter a dollar amount Prepare the adjusting entry at March 31, 2022, to record bad debt expense. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)Account Titles and Explanation Debit CreditEnter an account title Enter a debit amount Enter a credit amountEnter an account title Enter a debit amount Enter a credit amount

Answer 1

Answer:

Period                             Accounts            %  Uncollectibles   Bad debt

                                   receivables 2017                                     expense

Current                            $65,600                       2%                     $1,312

1 - 30 days past due       $13,500                         5%                    $675

31 - 90 days past due     $9,800                         28%                   $2,744

Over 90 days past due  $7,700                          47%                   $3,619

Total                                 $96,600                                                $8,350

So, the total estimated uncollectibles is $8,350

Date                Account Titles and Explanation      Debit        Credit

31-03-2017    Bad debt expense                             $6,063

                     ($8350 - $2287)

                               Allowance for Doubtful accounts               $6,063

                     (Being adjustment entry to record bad debts recorded)