Estimating Uncollectible Accounts and Reporting Accounts Receivable

Estimating Uncollectible Accounts and Reporting Accounts ReceivableLaFond Company analyzes its accounts receivable at December 31,

Estimating Uncollectible Accounts and Reporting Accounts Receivable

LaFond Company analyzes its accounts receivable at December 31, and arrives at the aged categories below along with the percentages that are estimated as uncollectible.

 

Age Group

Accounts

Receivable

Estimated

Loss %

0-30 days past due $ 90,000 1%
31-60 days past due 20,000 2
61-120 days past due 11,000 5
121-180 6,000 10
Over 180 days past due 4,000 25
Total accounts receivable $ 131,000

The balance of the allowance for uncollectible accounts is $520 on December 31, before any adjustments.

(A) What amount of bad debts expense will LaFond report in its income statement for the year?

$Answer 2930

(b) Use the financial statement effects template to record LaFond’s bad debts expense for the year.

Use negative signs with your answers, when appropriate.

Balance Sheet

Transaction Cash Asset + Noncash

Assets

= Liabilities + Contributed

Capital

+ Earned

Capital

Record bad debts expense Answer 0

 

Answer -2930 Answer 0 Answer 0

 

Answer -2930
Income Statement

Revenue


Expenses

=

Net Income
Answer 0

 

Answer 2930

 

Answer -2930

(c) What is the balance of accounts receivable on it December 31 balance sheet?

$Answer 134450

 

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