Schedule of Accounts receivable

1.The following information is available regrading the outstanding accounts receivable of Mufu Contracting at September 30, 211:

Month of credit Sale
Customer May June July Aug Sept
B. Axley 28,000 0 0 0 0
T. Holton 0 0 72,000 24,000 14,000
W. Nix 0 18,000 0 4,000 12,000
C. Percy 0 0 4,000 0 10,000
K. Willis 0 0 0 0 96,000
*All services are performed on terms of n/30. Assume all sales occured on the last day of the month

Mufu estimates bad debts using the follwing rates:
Not due yet=0.5%
1 to 29 days past due=1%
30 to 59 says past due=4%
60 to 89 days past due=10%
90 to 119 days past due=20%
Over 119 days past due=50%

Required:
a) Complete a schedule of Accounts receivable by age at September 30, 2011
b) The Allowance for Doubtful accounts showed an unadjusted balance on September 30, 2011 of $1,600. Record the adjusting entry at September 30, 2011 to estimate uncollectible accounts.

2.Vuaxall Holdings showed the following information regarding accountings receivable

Note Date of Note Principal Interest
Rate Term Maturity Date Days of Accured Interest at Dec. 31, 2011 Accured Interest at Dec, 31 2011
1 Nov 1/10 240,000 7% 180 days
2 Jan 5/11 100,000 8% 90 days
3 Nov
20/11 90,000 10% 45 days
4 Dec 10/11 120,000 12% 30 days
*Round calculations to the nearest whole cent.

Required:
For each note:
a)Determine the maturity date
b) Calculate the days of accured interest of any at December 31, 2011
c) Calculate the amount of accured interest if any at December 31, 2011

For note 3:
d) Prepare the entry to record accured interest at December 31, 2011
e) Prepare the entry to record the collection on the maturity date. Assume that both interest and principal are collected at maturity.

3.
On december 31, 2011 Nutramade Company's Allowance for doubtful accounts had an unadjusted balance of $4,100. The accountant for Nutramade has prepared a schedule of the December 31, 2011 accounts receivable by age and on the basis of past experience has estimated the percentage of the receivables in each age category that will become uncollectible This information is summarized as follows:
Dec 31, 2011 Accounts Receivable Age of Accounts Receivable Expected Percentage Uncollectiable
296,400 Not due(under 30 days) 2%
177,800 1 to 30 days past due 4%
58,000 31 to 60 days past due 8.5%
7,600 61 to 90 days past due 39%
3,800 Over 90 days past due 82.5%
Required:
a)Calculate the amount that should appear in the December 31, 2011 balance sheet as the allowance for doubtful accounts
b)Prepare the journal entry to record bad debt expense for 2011

Attachments

Solution Summary

The solution explains how to complete the schedule of Accounts receivable and make the adjusting entry for uncollectible accounts