Al-Hashimi Co. uses the Balance Sheet approach to estimate their bad debts. An analysis of
the Accounts Receivable on December 31, 2008 produced the following age groups and the
estimated percentage probably uncollectible:
The estimated amount of bad debts using the Balance Sheet approach is: *
(2 Points)
Provision for bad debts has credit balance of BD2,300,
Required:
Using the information, choose the correct answer for the following questions:
The adjusting entry required to bring the Provision for Bad Debts to the proper amount is:
Amount
Estimated
Age group
(BD)
Percent
Estimated
Amount
Uncollectible Uncollectible
(BD)
Not yet due
51,000
1%
1-30 days past due
29,000
3
31-60 days past due
12,000
10
61-90 days past due
3,000
20
More than 90 days past due
5,000
50
Total Accounts Receivable
100,000
Bad Debts Expense BD2,300 DR / Provision for Doubtful Debts BD2,300 CR
Provision for Doubtful Debts BD2,300 DR / Bad Debts Expense BD2,300 CR
Bad Debts Expense BD3,380 DR / Provision for Doubtful Debts BD3,380 CR
Bad Debts Expense BD5,680 DR / Provision for Doubtful Debts BD5,680 CR
None of the above
