Question - Ingles Company has accounts receivable of $99,700 at March 31. An analysis of the accounts shows the following.
Month of Sale Balance, March 31
March $77,900
February 23,000
January 8,900
Prior to January 8,000
$117,800
Credit terms are 2/10, n/30. At March 31, Allowance for Doubtful Accounts has a credit balance of $1,300 prior to adjustment. The company uses the percentage-of-receivables basis for estimating uncollectible accounts. The company's estimate of bad debts is as follows.
Age of Accounts Estimated Percentage Uncollectible
1-30 days 3.0%
31-60 days 6.0%
61-90 days 31.0%
Over 90 days 51.0%
Required -
Determine the total estimated uncollectibles.
Prepare the adjusting entry at March 31 to record bad debts expense.