I-07.04 Problem

I-07.04 Problem - 3,700 Xhi October 20, 2010 15,100 Zebra...

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I-07.04 Walt's manufactures and sells customized work clothes and uniforms. Following is a list of accounts receivable as of December 31, 2010. Customer Date of Sale Amount Air There Freight December 11, 2010 12,300 Aurora November 12, 2010 5,000 Batesville August 18, 2010 14,805 CarMan December 9, 2010 21,900 Clinic Quick August 15, 2009 16,040 Delorres River Guides September 19, 2010 8,990 Elonzo's Restaurant December 17, 2010 11,789 Hospital Supply December 4, 2010 135,100 Inidigo November 29, 2010 16,500 Meridan Oil May 20, 2010 11,786 Museum of Art December 21, 2010 255,000 Novellus February 16, 2010 18,780 Norman's December 23, 2010 10,000 Robert Ricketts December 14, 2010 3,550 Sanchez Systems October 25, 2010 22,310 Security by the Hour December 13, 2010 40,900 Stop Shop December 27, 2010 34,700 Target Time February 3, 2010 14,440 Uvlade Ranch December 7, 2010
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Unformatted text preview: 3,700 Xhi October 20, 2010 15,100 Zebra Sports December 3, 2010 144,000 (a) Sort the receivables list by age category and determine the estimated balance of uncollectible accounts. Walt's believes the following rates of noncollection will occur: 1% of receivables up to 30 days, 3% for 31 to 90 days, 10% for 91 to 180 days, and 40% of accounts over 180 days. (b) If the balance of Allowance for Uncollectible Accounts contained $15,000 (credit), what adjusting entry is needed to reflect the analysis from part (a). (c) If the balance of Allowance for Uncollectible Accounts contained $15,000 (debit), what adjusting entry is needed to reflect the analysis from part (a). (d) How is it possible that the allowance account could contain a debit balance, as in part (c)?...
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