The cousins company had the following transactions in 2015;
1 recorded $450000 of sales revenue earned on account
2 collected $244000 cash from customers for sales on account
3 paid $120000 cash for operating expenses
4 the balance on allowance account at 1/1/2015 was $5000. during the year, customer accounts written off amounted to $6000
an aging list of accounts receivable balance shows that 70% of the balance at december 31 is current. 10% is 1-30 days overdue. 10% is 31-60 days overdue. 10% is 61-90 days overdue,and 10% is 90+ days overdue.
Required:
1 using t accounts record the above events and calculae the balance on accounts receivable at december 31
2 calculate the new allowance for doubtful accounts balance and then record the required adjusting entry in the t accounts mentioned in 1 above. the company takes 90+ days at 50%, 61-90days at 20% and 31-60 days at 10% as far as calculating the allowance is concerned.