Cowens, a large department store located in a metropolitan area, has been experiencing difficulty in...
50.1K
Verified Solution
Link Copied!
Question
Accounting
Cowens, a large department store located in a metropolitan area, has been experiencing difficulty in estimating its bad debts. The company has decided to prepare an aging schedule for its outstanding accounts receivable and estimate bad debts by the due dates of its receivables. This analysis discloses the following information:
Balance
Age of Receivable
Estimated Percentage Uncollectible
$191,000
Under 30 days
0.8%
118,000
30-60 days
2.0%
73,000
61-120 days
5.0%
41,000
121-240 days
20.0%
25,000
241-360 days
35.0%
19,000
Over 360 days
60.0%
$467,000
Required:
1.
Use the preceding analysis to compute the estimated amount of uncollectible receivables.
2.
Prepare the journal entry to record Cowens estimated uncollectibles, assuming the balance in Allowance for Doubtful Accounts prior to adjustment is:
A.
0
B.
$3,000 (debit)
C.
$2,500 (credit)
Answer & Explanation
Solved by verified expert
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
