Menge Company has accounts receivable of $107,000 at March 31

Menge Company has accounts receivable of $107,000 at March 31. Credit terms are 2/10, n/30. At March 31, Allowance for Doubtful Accounts has a credit balance of $1,300 prior to adjustment. The company uses the percentage-of-receivables basis for estimating uncollectible accounts. The company’s estimate of bad debts is shown below.

Age of Accounts

Balance,
March 31

Estimated Percentage
Uncollectible
1–30 days $68,000 3%
31–60 days 21,900 5%
61–90 days 9,500 25%
Over 90 days 7,600 50%
107,000

Determine the total estimated uncollectibles.

Prepare the adjusting entry at March 31 to record bad debt expense.

Determine the total estimated uncollectibles.

nts Receivable

Amount

%

Estimated
Uncollectible
1–30 days $68,000 x3%= $2,040
31–60 days 21,900 x5%= 1,095
61–90 days 9,500 x25%= 2,375
Over 90 days 7,600 x5%= 3,800
total estimated uncollectibles = $9,310

Prepare the adjusting entry at March 31 to record bad debt expense.

Bad Debt Expense debit ($9,310 – $1,300) = $8,010
Allowance for Doubtful Accounts credit 8010