Estimating allowance for doubtful accounts                               Devers Company has the following balances in their accounts receivable account               and allowance for doubtful accounts at the end of the period ending September 30, 2021.                                 Accounts Receviable   Allow. for Doubtful Accts         505,000       3,000                                     Devers has a past history of uncollectible accounts as shown below:                                 Accounts Receivable Age Class Percentage Uncollectible         $275,000 1-30 days 0.50%         $100,000 31-60 days 2.00%         $ 60,000 61-90 days 7.00%         $ 50,000 91-120 days 18.00%         $ 20,000 > 120 days 60.00%                       Required                               1. Estimate the amount that should be in the Allowance for Doubtful Accounts               based on the aging of the accounts receivable schedule above                 Enter the amount here ==========>     -                                       2. Journalize the necessary entry to record the bad debt expense for September 30.                               Date Accounts and Explanations Debit Credit

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Bad Debts

At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.  

Accounts Receivable

The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.