LO2 SIRE TH ITINE P8-3A. Credit Losses Based on Accounts Receivable At December 31,...
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LO2 SIRE TH ITINE P8-3A. Credit Losses Based on Accounts Receivable At December 31, Mueller Company had a balance of 409,000 in its Accounts Receivable account and a credit balance of $4,200 in the Allowance for Doubtful Accounts account. The accounts receivable T-account consisted of $414,000 in debit bul. ances and $5,000 in credit balances. The company aged its accounts as follows: Current $344.000 0-60 days past due 44,000 61-180 days past due 18.000 Over 180 days past due 3,000 $414,000 In the past, the company has experienced credit losses as follows: one percent of current balances, five percent of balances 0-60 days pust due, 18 percent of balances 61-180 days past due, and 30 percent of balances over six months past due. The company bases its allowance for doubtful accounts on an aging analysis of accounts receivable. Required Prepare the adjusting entry to record the allowance for doubtful accounts for the year. Show how Accounts Receivable (including the credit balances) and the Allowance for Doubtful Accounts would appear on the December 31 balance sheet. a. b. TA
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