acc505 you re the accountant in charge of the collection of receivables for the duns 492128
You’re the accountant in charge of the collection of receivables for the Dunstone Company. An analysis of the year-end receivables shows the following:
|
Time Interval |
Amount |
Estimated Percentage Uncollectible |
|
Not yet due |
18,000 |
3% |
|
1–30 days past due |
21,000 |
5% |
|
31–60 days past due |
8,000 |
10% |
|
61–90 days past due |
3,000 |
20% |
|
Over 90 days past due |
2,500 |
40% |
|
52,500 |
You’re to prepare an entry to adjust the Allowance for Doubtful Accounts to the proper balance using the aging of accounts receivable method. The credit balance in the Allowance for Doubtful Accounts account before adjustment is $500.
The correct journal entry is:
A. Uncollectible Accounts Expense 4,490
Allowance for Doubtful Accounts 4,490
B. Uncollectible Accounts Expense 4,240
Allowance for Doubtful Accounts 4,240
C. Uncollectible Accounts Expense 3,990
Allowance for Doubtful Accounts 3,990
D. Uncollectible Accounts Expense 3,490
Allowance for Doubtful Accounts 3,490
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