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    Grayson Group

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    Grayson Group showed the following unadjusted account balances,
    each with a normal balance, at December 31, 2007:

    Accounts Receivable $374,000
    Allowance for Doubtful Accounts $2,200
    Sales (all on credit) $1,125,000
    Sales Discounts $17,000

    Grayson Group uses an aging analysis to estimate uncollectible
    receivables as shown below:

    31-Dec-07 Ages of Accounts Estimated
    Accounts Receivable Percentage
    receivable Uncollectible

    $290,000 Not due(under 30 days) 1.00%
    $61,000 1 to 30 days past due 4.00%
    $19,000 31 to 60 days past due 10.00%
    $4,000 over 60 days past due 60.00%

    Required:

    a. Calculate the amount that should appear in the December 31, 2007 balance
    sheet as the allowance for doubtful accounts:____________________________.

    b. Calculate the amount that should appear in the income statement for the year
    ended December 31, 2007, as a bad debt expense:_______________________.

    c. Prepare the December 31, 2007 adjusting entry to record the estimated bad debt
    expense for the year just ended.

    Date Account Titles and Explanation Debit Credit

    d. What is the purpose of the adjusting entry in (c) above?

    © BrainMass Inc. brainmass.com June 3, 2020, 11:13 pm ad1c9bdddf
    https://brainmass.com/business/journal-entries/calculate-allowance-doubtful-accounts-prepare-journal-entry-269438

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    Grayson Group showed the following unadjusted account ...

    Solution Summary

    This solution is comprised of a detailed explanation to calculate the amount that should appear in the December 31, 2007 balance sheet as the allowance for doubtful accounts.

    $2.19

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