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Econ 102 Chapter 7 Homework
- Course
- Econ 102
- Institution
- Queens College
Chapter 7 Homework for Econ 102.
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1, Putnam & Putnam, a legal firm, uses the balance sheet approach to estimate uncollectibleaccounts expense. At year-end, an aging of the accounts receivable produced the following five
groupings.
On the basis of past experience, the company estimated the percentages probably uncollectible
for the five age groups to be as follows: Group a, 1 percent; Group b, 3 percent; Group c, 10
percent; Group d, 20 percent; and Group e, 50 percent.
The Allowance for Doubtful Accounts before adjustment at December 31 showed a credit
balance of $7,080.
Required:
a. Compute the estimated amount of uncollectible accounts based on the above classification by
age groups.
b. Prepare the adjusting entry needed to bring the Allowance for Doubtful Accounts to the proper
amount.
c. Assume that on January 10 of the following year, Putnam & Putnam learned that an account
receivable that had originated on September 1 in the amount of $5,160 was worthless because of
the bankruptcy of the client, Safeland Co. Prepare the journal entry required on January 10 to
write off this account.
a. W
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