The balance of accounts receivable is $275,000. The allowance for uncollectible accounts has a credit of $240. Net credit sales for the year were $771,000 and cash sales were $68,000. Information for estimating uncollectible accounts expense is presented below. For each independent situation, prepare the adjusting entry to record the estimate and determine the resultant balance in the allowance for uncollectible accounts.
a. The company uses the aging-of-accounts-receivable method. A partial aging of accounts receivable balance is presented below.
Days Outstanding: Amount: % Uncollectible:
Not yet due $150,000 1%
31-50 days past due $50,000 5%
61-90 days past due $40,000 10%
91-120 days past due $25,000 25%
over 120 days past due $10,000 50%