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The Tigers need to record a journal entry to estimate their bad debt expense for the period

Accounting Dec 01, 2020

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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