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The Tigers need to record a journal entry to estimate their bad debt expense for the period
The Tigers need to record a journal entry to estimate their bad debt expense for the period. The A/R aging shows a total of $750,000 in Accounts Receivable, which is broken down as follows in age: $500,000 is 0 - 30 days old; $200,000 is 31 - 60 days old; and $50,000 is over 60 days old. Under the aging of receivables approach for estimating bad debt expense, the Tigers expect the following uncollectible %'s: 1% of the A/R that is 0 - 30 days old; 12% of the A/R amounts 31 - 60 days old, and 21% of the A/R amount past due for more than 60 days. The Allowance for Uncollectible A/R account currently has a beginning debit balance of $1,000. What amount will be credited to the Allowance for Uncollectible A/R account for this journal entry. Fill in the blank with your calculated number. DO NOT include commas, $ signs, period, decimal points, etc., just enter the raw number. Webcourses will add commas to your answer automatically. For example, if you calculated the answer to be $24,123, you would only input: 24123
Expert Solution
Amount to be credited to Allowance for uncollectible A/R=40500
Workings:-
| 0-30 days | 31-60 days | Over 60 days | Total |
| 500000 | 200000 | 50000 | 750000 |
| 1% | 12% | 21% | |
| 5000 | 24000 | 10500 | 39500 |
| Particulars | Amt. in $ | Workings |
| Closing balance of Allowance for uncollectible A/R should be | 39500 | Cr |
| Opening Dr. balance of Allowance for uncollectible A/R | 1000 | Dr |
| Amount to be credited to Allowance for uncollectible A/R | 40500 | 39500+1000 |
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