Prepare the adjusting entry required at december

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Reference no: EM131783553

1. Timken Inc. made $900,000 in sales during 2016. Twenty-five percent of these were cash sales. During the year, $22,500 of accounts receivable were written off as being uncollectible. In addition, $13,500 of the accounts that were written off in 2015 were unexpectedly collected. At its' year-end December 31, 2016, Timken had $225,000 of accounts receivable. The balance in the Allowance for Doubtful Accounts general ledger account was $13,500 credit at December 31, 2015.

Age (days)

Accounts

Receivable

1-30

$ 90,000

31-60

45,000

61-90

22,500

91-120

54,000

Over 120

13,500

Total

$225,000


Required:

Prepare journal entries to record the following 2016 transactions:
The write-off of $22,500
The recovery of $13,500
Recalculate the balance in the Allowance for Doubtful Accounts general ledger account at December 31, 2016.
The estimated uncollectible accounts at December 31, 2016 are calculated as follows:

Age (days)

Estimated 

Loss

percentage

1-30

1.5%

31-60

3%

61-90

4%

91-120

9%

Over 120

45%

Required: Prepare the adjusting entry required at December 31, 2016.

Reference no: EM131783553

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