Problem
Splish Brothers Inc. has accounts receivable of $100,400 at March 31, 2017. Credit terms are 2/10, n/30. At March 31, 2017, there is a $2,262 credit balance in Allowance for Doubtful Accounts prior to adjustment. The company uses the percentage-of-receivables basis for estimating uncollectible accounts. The company's estimates of bad debts are as shown below.
|
Balance, March 31
|
Estimated Percentage
Uncollectible
|
|
Age of Accounts
|
2017
|
2016
|
|
Current
|
$69,500
|
$77,290
|
2%
|
|
1-30 days past due
|
13,100
|
8,230
|
5
|
|
31-90 days past due
|
9,800
|
2,430
|
29
|
|
Over 90 days past due
|
8,000
|
1,190
|
50
|
|
$100,400
|
$89,140
|
|
Determine the total estimated uncollectibles.
Prepare the adjusting entry at March 31, 2017, to record bad debt expense.