Fife Company has the following account balances at December 31 of the current year: Accounts Receivable $44,000 and Allowance for Doubtful Accounts $600 (credit balance). Fife uses the aging of accounts receivable to estimate bad debts. The following aging schedule reflects the situation at year-end:

\text { Schedule af Accounts Receivable by Age }

\begin{array}{|l|r|r|r|r|r|r|}\hline \begin{array}{r}\text { Customers} \\\text { Name}\end{array} & \text { Total } & \begin{array}{r}\text { Not yet } \\\text { due }\end{array} & \begin{array}{r}{1 - 3 0} \text { days } \\\text { past due }\end{array} & \begin{array}{r}\text { 31-60 days } \\\text { past due }\end{array} & \begin{array}{r}\text { 61-90 days } \\\text { past due }\end{array} & \begin{array}{r}\text { Over 90 } \\\text { days past } \\\text { due }\end{array} \\\hline \text { S. Milken } & 12,000 & 5,000 & 3,000 & 2,000 & 1,000 & 1,000 \\\hline \text { F. Filip } & 7,000 & 1,000 & 2,000 & 1,000 & 800 & 2,200 \\\hline \text { J. Riley } & 14,000 & 8,000 & 3,000 & 2,000 & 100 & 900 \\\hline \text { R. Cash } & 3,000 & 2,000 & 1,000 & & & \\\hline \text { L. Faraday } & 8,000 & 1,000 & 7,000 & & & \\\hline \text { Totals } & 44,000 & 17,000 & 16,000 & 5,000 & 1,900 & 4,100 \\\hline \begin{array}{l}\text { Percent }\end{array} & & 2 \% & 5 \% & 10 \% & 25 \% & 40 \% \\\text { Uncollectible } & & & & & & \\\hline\end{array}

(1) Calculate the amount of the Allowance for Doubtful Accounts that should appear on the December 31, current year, balance sheet. (2) Prepare the journal entry to record bad debts expense for the current year.

TechCom Had Net Sales of $315,000 and Average Accounts Receivable

Essay

Correct Answer:VerifiedTechCom = 4.2, ZCom = 3.7. Tec...View AnswerUnlock this answer nowGet Access to more Verified Answers free of chargeView Full Answer For Free

Correct Answer:
Verified
TechCom = 4.2, ZCom = 3.7. Tec...
View Answer
Unlock this answer now
Get Access to more Verified Answers free of charge