Question Completion:
Daley Company estimates uncollectible accounts using the allowance method at December 31. It prepared the following aging of receivables analysis.
                                                         Days Past Due  
                           Total          0          1 to 30       31 to 60   61 to 90  Over 90
Accounts
 receivable  $570,000 $396,000  $90,000  $36,000   $18,000  $30,000  
Percent uncollectible          1%             2%             5%             7%           10%  
a. Complete the below table to calculate the estimated balance of Allowance for Doubtful Accounts using the aging of accounts receivable method.
Answer:
Daley Company
a. The estimated balance of Allowance for Doubtful Accounts using the aging of accounts receivable method is:
= $11,820.
b. Adjusting Journal Entry:
Debit Bad debts expense $6,420
Credit Allowance for Doubtful Accounts $6,420
To record bad debts expense and bring Allowance balance to $11,820.                       
c. Adjusting Journal Entry:
Debit Bad debts expense $13,720
Credit Allowance for Doubtful Accounts $13,720
To record bad debts expense and bring Allowance balance to $11,820.   
Explanation:
a) Data and Calculations:
Ageing of Accounts Receivable:
                                                         Days Past Due  
                           Total          0          1 to 30       31 to 60   61 to 90  Over 90
Accounts
 receivable  $570,000 $396,000  $90,000  $36,000   $18,000  $30,000  
Percent uncollectible          1%             2%             5%             7%           10%
Allowance      $11,820     $3,960      $1,800     $1,800      $1,260    $3,000
Bad Debts Expense:
Allowance for Doubtful Accounts:
                                          b.                                 c.
Unadjusted balance $5,400 credit              $1,900 debit
Adjusted balance       11,820 credit               11,820 credit
Bad debts expense $6,420                       $13,720