Reference no: EM13546199

Leland Hotels has accounts receivable of $98,100 at March 31. An analysis of the accounts shows the following:

Month of Sale	Balance, March 31
March	$65,000
February	17,600
January	8,500
Prior to January	7,000
	$98,100

Credit terms are 2/10, n/30. On 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 as follows:

Age of Accounts	Estimated  Percentage Uncollectible
1-30 days	2.0%
30-60 days	5.0%
60-90 days	30.0%
Over 90 days	50.0%

Instructions

(a) Determine the total estimated uncollectible.

(b) Prepare the adjusting entry at March 31 to record bad debts expense.