Bonita Company Estimates Uncollectible Accounts Using the Allowance Method at December

question 45

Essay

Bonita Company estimates uncollectible accounts using the allowance method at December 31.It prepared the following aging of receivables analysis.
$$\begin{array} { | l | r | r | r | r | r | r | } \hline & & & { \text { Days } } &{ \text { Past } } & \text { Due } & \\\hline & \text { Total } & \text { Current } & { 1 \text { to } 30 } & 31 \text { to } 60 & 61 \text { to } 90 & \text { Over } 90 \\\hline \text { Accounts receivable } & \$ 110,000 & 68,000 & 17,000 & 10,000 & 8,000 & 7,000 \\\hline \text { Percent uncollectible } & & 1 \% & 2 \% & 5 \% & 8 \% & 13 \% \\\hline\end{array}$$
a.Estimate the balance of the Allowance for Doubtful Accounts using the aging of accounts receivable method.
b.Prepare the adjusting entry to record Bad Debts Expense using the estimate from part a.Assume the unadjusted balance in the Allowance for Doubtful Accounts is a $550 credit.
c.Prepare the adjusting entry to record Bad Debts Expense using the estimate from part a.Assume the unadjusted balance in the Allowance for Doubtful Accounts is a $300 debit.

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Definitions:

Antibody-Mediated Immunity

A type of immunity that involves the production of antibodies by B cells in response to an antigen, providing targeted protection against pathogens.

Cell-Mediated Immunity

Cell-mediated immunity is an immune response that does not involve antibodies but rather the activation of phagocytes, antigen-specific cytotoxic T-lymphocytes, and the release of various cytokines in response to an antigen.

Periarterial Lymphatic Sheath

Dense accumulation of lymphocytes (white pulp) surrounding arteries within the spleen.

Red Pulp

A component of the spleen consisting of blood-filled venous sinuses and splenic cords, involved in the filtration of blood and removal of old or damaged red blood cells.