Carmack company has credit sales of 280 million for year

Reference no: EM13453773

Carmack Company has credit sales of $2.80 million for year 2011. On December 31, 2011, the company's Allowance for Doubtful Accounts has an unadjusted credit balance of $18,803. Carmack prepares a schedule of its December 31, 2011, accounts receivable by age. On the basis of past experience, it estimates the percent of receivables in each age category that will become uncollectible. This information is summarized here.

December 31, 2011 Accounts Receivable Age of Accounts Receivable Expected Percent Uncollectible $ 560,000 Not yet due 1.05 % 224,000 1 to 30 days past due 1.80 44,800 31 to 60 days past due 6.30 22,400 61 to 90 days past due 31.75 4,480 Over 90 days past due 66.00

1. Estimate the required balance of the Allowance for Doubtful Accounts at December 31, 2011, using the aging of accounts receivable method.

2. Prepare the adjusting entry to record bad debts expense at December 31, 2011.

General Journal Debit Credit Bad debt expenses ?? Allowance for doubtful accounts ?

Reference no: EM13453773

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