Presented below is an aging schedule for McCann Company.
Number of Days Past Due
Customer
Total
Not Yet Due
1–30
31–60
61–90
Over 90
Amos
$ 24,900
$11,500
$13,400
Brian
41,700
$ 41,700
Chevy
59,900
17,700
6,700
$35,500
Drake
36,200
$36,200
Others
135,700
97,800
16,100
14,900
6,900
$298,400
$157,200
$34,300
$28,300
$35,500
$43,100
Estimated Percentage Uncollectible
2%
4%
13%
25%
61%
Total Estimated Bad Debts
$ 43,361
$ 3,144
$ 1,372
$ 3,679
$ 8,875
$26,291
At December 31, 2012, the unadjusted balance in Allowance for Doubtful Accounts is a credit of $13,770.
(a)
Journalize and post the adjusting entry for bad debts at December 31, 2012. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)
Date
Account Titles and Explanation
Debit
Credit
Dec. 31
[removed]
[removed]
[removed]
[removed]
[removed]
[removed]
Bad Debts Expense
Date
Explanation
Ref
Debit
Credit
Balance
Dec. 31
Adjusting
[removed]
[removed]
[removed]
Allowance for Doubtful Accounts
Date
Explanation
Ref
Debit
Credit
Balance
Dec. 31
Balance
[removed]
[removed]
[removed]
Dec. 31
Adjusting
[removed]
[removed]
[removed]
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(c)
The parts of this question must be completed in order. This part will be available when you complete the part above.
Problem 9-6A
Manatee Company closes its books monthly. On September 30, selected ledger account balances are:
Notes Receivable
$99,600
Interest Receivable
372
Notes Receivable include the following.
Date
Maker
Face
Term
Interest
Aug. 16
M. Bear Inc.
$ 25,200
60 days
8%
Aug. 25
Pope Co.
12,000
60 days
10%
Sept. 30
Quackers Corp.
62,400
6 months
9%
Interest is computed using a 360-day year. During October, the following transactions were completed.
Oct. 7
Made sales of $7,680 on Manatee credit cards.
12
Made sales of $1,400 on MasterCard credit cards. The credit card service charge is 2%.
15
Added $521 to Manatee customer balance for finance charges on unpaid balances.
15
Received payment in full from M. Bear Inc. on the amount due.
24
Received notice that the Pope note has been dishonored. (Assume that Pope is expected to pay in the future.)
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