The following aging of accounts receivable is for Coby Company at the end of 2003:
|
Aging of Accounts Receivable 31 Dec 03 |
|||||
|
Overall |
Less Than 30 Days |
31 to 60 Days |
61 to 90 Days |
Over 90 Days |
|
|
Travis Campbell |
50,000 |
40,000 |
5,000 |
2,000 |
$3,000 |
|
Linda Reed |
35,000 |
31,000 |
4,000 |
||
|
Jack Riding |
110,000 |
100,000 |
10,000 |
||
|
Joy Riddle |
10/3/1954 |
3/18/1908 |
10,000 |
4,000 |
3,000 |
|
Afzal Shah |
$90,000 |
60,000 |
21,000 |
4,000 |
5,000 |
|
Edna Ramos |
80,000 |
60,000 |
16,000 |
4,000 |
|
|
Totals |
385,000 |
$294,000 |
$66,000 |
$10,000 |
$15,000 |
Coby Company had a credit balance of $20,000 in its allowance for bad debts account at the beginning of 2003. Write offs for the year totaled $16,500. Coby Company makes only one adjusting entry to record bad debt expense at the end of the year. Historically, Coby Company has experienced the following with respect to the collection of its accounts receivable:
|
Age of Account |
Percentage Ultimately Uncollectible |
|
Less than 30 days |
0 |
|
31 60 days |
5 |
|
61 90 days |
30 |
|
Over 90 days |
90 |
Required
1. Compute the appropriate balance of allowance for bad debts as of December 31, 2003.
2. Make the journal entry required to record this allowance for bad debts balance. Remember that the allowance account already has an existing balance.
3. What is Coby s net accounts receivable balance as of December 31, 2003?