Fife Company Has the Following Account Balances at December 31 $$\text { Schedule af Accounts Receivable by Age }$$

question 145

Essay

Fife Company has the following account balances at December 31 of the current year: Accounts Receivable $44,000 and Allowance for Doubtful Accounts $600 (credit balance). Fife uses the aging of accounts receivable to estimate bad debts. The following aging schedule reflects the situation at year-end:
$$\text { Schedule af Accounts Receivable by Age }$$
$\begin{array}{|l|r|r|r|r|r|r|}\hline \begin{array}{r}\text { Customers} \\\text { Name}\end{array} & \text { Total } & \begin{array}{r}\text { Not yet } \\\text { due }\end{array} & \begin{array}{r}{1 - 3 0} \text { days } \\\text { past due }\end{array} & \begin{array}{r}\text { 31-60 days } \\\text { past due }\end{array} & \begin{array}{r}\text { 61-90 days } \\\text { past due }\end{array} & \begin{array}{r}\text { Over 90 } \\\text { days past } \\\text { due }\end{array} \\\hline \text { S. Milken } & 12,000 & 5,000 & 3,000 & 2,000 & 1,000 & 1,000 \\\hline \text { F. Filip } & 7,000 & 1,000 & 2,000 & 1,000 & 800 & 2,200 \\\hline \text { J. Riley } & 14,000 & 8,000 & 3,000 & 2,000 & 100 & 900 \\\hline \text { R. Cash } & 3,000 & 2,000 & 1,000 & & & \\\hline \text { L. Faraday } & 8,000 & 1,000 & 7,000 & & & \\\hline \text { Totals } & 44,000 & 17,000 & 16,000 & 5,000 & 1,900 & 4,100 \\\hline \begin{array}{l}\text { Percent }\end{array} & & 2 \% & 5 \% & 10 \% & 25 \% & 40 \% \\\text { Uncollectible } & & & & & & \\\hline\end{array}$ (1) Calculate the amount of the Allowance for Doubtful Accounts that should appear on the December 31, current year, balance sheet. (2) Prepare the journal entry to record bad debts expense for the current year.

---

Definitions:

Expensive

Involving a high cost or requiring considerable expenditure of resources.

Natural B Data

Behavioral data collected from real-world settings, as opposed to controlled laboratory conditions, ensuring the authenticity and ecological validity of observations.

Unstructured Clinical Interview

A type of clinical interview that does not follow a specific set of questions but is instead guided by the clinician's observations and the patient's responses.

Psychological Interpretation

The process of understanding behaviors, thoughts, and emotions through frameworks and theories in psychology.