Determine the total estimated uncollectibles

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Reference no: EM131914362

Problem

Menge Company has accounts receivable of $93,100 at March 31. An analysis of the accounts shows the following information.

Credit terms are 2/10, n/30. At March 31, Allowance for Doubtful Accounts has a credit balance of $1,200 prior to adjustment. The company uses the percentage-of-receivables basis for estimating uncollectible accounts. The company's estimate of bad debts is shown below.

Month of Sale	Balance, March 31
March	$60,000
February	17,600
January	8,500
Prior to January	7,000
	$93,100
Age of Accounts	Estimated Percentage Uncollectible
1-30 days	2.0%
31-60 days	5.0%
61-90 days	20.00%
Over 90 days	50.00%

A. Determine the total estimated uncollectibles.

B. Prepare the adjusting entry at March 31 to record bad debt expense.

Reference no: EM131914362

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