Answer:
Cheyenne Company
Schedule OF Accounts Receivable By Age
Customer Totals Not Days Past Due
Due Yet 1-30 31-60 61-90 Over 90 Days
Anders $ 25,800 $11,800 $14,000
Blake $ 40,400 $ 40,400
Coulson 58,400 16,800 5,800 $35,800
Deleon 33,200 $33,200
Others 133,400 97,000 16,300 13,800 6,300
$291,200 $154,200 $33,900 $27,800 $35,800 $39,500
Estimated
Percentage
Uncollectible 3% 6% 14% 24% 49%
Total
Estimated
Bad Debts $ 38,499 $ 4,626 $ 2,034 $ 3,892 $ 8,592 $19,355
The final total $ 38,499 shown in the first column is the estimated balance for the Allowance for Doubtful Accounts. At December 31, 2020, the unadjusted balance in Allowance for Doubtful Accounts is a credit of $11,600.
The required adjustment to the Allowance for Doubtful Accounts is ( $ 38,499- $ 11,600) = $ 26899. This yields the following end of period adjusting entry
Unadjusted Balance ---------------------------$ 11,600 Cr.
Estimated Balance------------------------------$ 38,499 Cr.
Required Adjustment $ 26899 Cr.
Dec 31 Bad Debt Expense $ 26899 Dr.
Allowance for Doubtful Accounts $ 26899 Cr.
To record estimated bad debts.
Assets = Liabilities + Equity
-26899 -26899
