Answered

Revise your worksheet to reflect these updated assumptions then answer the questions that follow. You have been provided with the following Aging Report to use to adjust the Allowance for Uncollectible Accounts for a company at year end. Age Group Accounts Receivable Estimated Percent Uncollectible Not yet due $ 78,000 5 % 1-30 days past due 34,000 10 % 31-60 days past due 16,000 20 % 61-90 days past due 10,000 40 % Over 90 days past due 12,000 80 % $ 150,000 Allowance for Uncollectible Accounts 1,500 Credit After reviewing the data, you note the 'not yet due' category is overstated by 20%, while the 'Over 90 days' category is understated by 20%, (this error also caused the AR balance on the schedule to not equal the amount of Accounts Receivable on the balance sheet). Also, you note the balance in the Allowance account is actually a debit, rather than a credit. Being that the normal balance for this account is a credit, the accountant hadn't noticed the issue. Required: 1. Use your spreadsheet to recalculate the needed adjustment and account balances. What will be the balance in Accounts Receivable and the Allowance for Uncollectible Accounts based on the above information?

Answer :

mltn1980

Answer:

1. Use your spreadsheet to recalculate the needed adjustment and account balances.

These are the new balances fo the accounts.

        Acc Rec  Allow  

5% $ 65,000 $ 3,250 Not yet due

10% $ 34,000 $ 3,400 1-30 days

20% $ 16,000  $ 3,200 31-60 days

40% $ 10,000  $ 4,000 61-90 days

80% $ 14,400  $ 11,520 Over 90 days

      $ 139,400 $ 25,370  

It's necessary to record an entry adjustment to the Allowance for Uncollectible Accounts to exhibit the correct balance.

Bad debt expense  $ 23,870  

Allowance for Uncollectible Accounts   $ 23,870

Final Balance    

Accounts Receivable  $ 139,400  

Allowance for Uncollectible Accounts   $ 25,370

Explanation:

At the begining the situation was :

 Balance

$ 78,000 5% $ 3,900

$ 34,000 10% $ 3,400

$ 16,000  20% $ 3,200

$ 10,000  40% $ 4,000

$ 12,000  80% $ 9,600

$ 150,000  $ 24,100

But then were changes in the balance of the Accounts Receivables, so the new escenario was:

Acc. Rec  Allow.  

5% $ 65,000 $ 3,250 Not yet due

10% $ 34,000 $ 3,400 1-30 days

20% $ 16,000  $ 3,200 31-60 days

40% $ 10,000  $ 4,000 61-90 days

80% $ 14,400  $ 11,520 Over 90 days

$ 139,400 $ 25,370  

================================================================

Bad debt expense  $ 23,870  

Allowance for Uncollectible Accounts   $ 23,870

With this entry the Allowance for Uncollectible Accounts with a credit of $1,500 it's corrected to the new balance of $25,370 Debit.

anthougo

1) The balances in the Accounts Receivable and the Allowance for Uncollectible Accounts based on the above information are as follows:

Accounts Receivable = $136,800

Allowance for Uncollectible Accounts = $25,240

What is the aging of accounts receivable?

The aging of accounts receivables is an accounting process of determining the allowance for doubtful accounts to be provided for accounts receivable balances based on their various age classifications.

Data and Calculations:

Age Group                   Accounts     Estimated Percent    Allowance for

                                   Receivable         Uncollectible        Uncollectible

Not yet due                    $78,000                   5%                    $3,900

1-30 days past due          34,000                 10 %                      3,400

31-60 days past due        16,000                20 %                      3,200

61-90 days past due        10,000                40 %                      4,000

Over 90 days past due   12,000                80 %                      9,600

Total                           $ 150,000                                           $24,100

Adjustment (Not due)    (15,600)                 5%                         (780)

Adjustment (over 90)       2,400                80%                       1,920

Adjusted total           $136,800                                         $25,240

Allowance for Uncollectible Accounts = $1,500 Credit (now debit)

Allowance for Uncollectible Accounts

Beginning balance       $1,500

Ending balance         $25,240

Bad Debts Expense $26,740

Learn more about aging accounts receivable at https://brainly.com/question/13762266

Other Questions