31-60 days overdue. 8% 25,000 61-90 days overdue…. 20% 8,000 Over 90 days... 50% Required: a. Calculate the amount of the Allowance for Doubtful Accounts that should be reported on the current year-end balance sheet. In other words your estimate. $2,200 $1,400 $3,600 $5,000 $4,000 Total: $16,200 b. Calculate the amount of the Bad Debts Expense that should be reported on the current year’s income statement, assuming that the balance of the Allowance for Doubtful 3
Accounts on January 1 of the current year was $24,000 and that accounts receivable written off during the current year totaled $15,000 Debt expense $15,000 Desired balance $16,200 Current balance $1,200 Adjustment $15,000 Use the following to answer question 5: The following information is available for the Avisa Company for the month of November: a. On November 30, after all transactions have been recorded, the balance in the company’s Cash account has a balance of $27,202. b. The company’s bank statement shows a balance on November 30 of $29,279. c. Outstanding checks at November 30 include check #3030 in the amount of $1,525 and check #3556 in the amount of $1,459. d. A memo included with the bank statement shows a $67 NSF check from a customer, J. Brown.