Caplan Corporation Uses the Accounts Receivable Aging Method to Account

question 78

Essay

Caplan Corporation uses the accounts receivable aging method to account for Uncollectible Accounts Expense.As of December 31,Caplan's accountant prepared the following data about ending receivables: $20,000 was not yet due (1 percent expected not to be collected),$10,000 was 1-60 days past due (4 percent expected not to be collected),and $2,000 was over 60 days past due (8 percent expected not to be collected).At December 31,Allowance for Uncollectible Accounts had a credit balance prior to adjustment of $200.In the journal provided,prepare Caplan's end-of-period adjustment for estimated uncollectible accounts.Also prepare the entry that would have been made had the credit balance instead been a debit balance.Omit explanations.

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Definitions:

Compound

A substance formed from two or more elements chemically united in fixed proportions; or, in a linguistic context, a term made up of two or more words functioning as a single unit.

Atomic

Constituting an undivided whole; elementary, with reference to particles or concepts.

Truth-functional Compound

A complex proposition in logic that is made up of simpler propositions and whose truth-value depends solely on the truth-values of these simpler propositions.

Quantifier

In logic, symbols that specify how many objects in the universe of discourse satisfy a given condition.