Question

Age Group Accounts Receivable Estimated Loss % 0-30 days past due $110,000 1% 31-60 days past due 40,000 2 61-120 days past due 27,000 5 121-180 days past due 14,000 10 Over 180 days past due 9,000 25 Total accounts receivable $200,000 The balance of the allowance for uncollectible accounts is $1,100 on December 31, before any adjustments. (a) What amount of bad debts expense will Collins report in its income statement for the year?

Answer 1

Bad debts expense for the year $ 5,800

Step-by-step explanation:

Calculation of bad debts as at December 31

Ageing of receivable Amount % Estimated

$ Uncollectible

$

0 - 30 days past due 110,000 1 % 1,100

31 - 60 days past due 40,000 2 % 800

61 - 120 days past due 27,000 5 % 1,350

121 - 180 days past due 14,000 10 % 1,400

Over 180 days past due 9,000 25 % 2,250

Totals 200,000 6,900

The required balance for allowance for uncollectible accounts is $ 6,900

Existing balance in allowance for uncollectible accounts $ 1,100

Bad Debts expenses for the year $ 5,800

Answer 2

The answer is attached below

Step-by-step explanation: