Reference no: EM132820272

Problem - Fey Corporation's balance for accounts receivable is $7,970 million and unadjusted balance for allowance for uncollectible account is $52 million (credit). Fey has aged its accounts receivable and estimated uncollectible accounts as follows (in millions):

Age of Receivables	Balance	Estimated % uncollectible
Current	$5,500	1%
30-60 days past due	1,200	3%
61-90 days past due	850	6%
Over 90 days past due	420	10%
Total	$7,970

Required -

1. Determine the appropriate allowance for uncollectible accounts.

2. How will Fey Corporation report its accounts receivable on the balance sheet?

3. What is Fey's bad debt expense of the year.

4. Use the financial statement effect templet to prepare the necessary adjusting entry.

5. Had Fey's unadjusted balance for allowance for uncollectible account been $52 million (debit), would your answer to Part 4 have been affected? If your answer is "yes", how?