E8-5 Hachey Company has accounts receivable of $95100 at March 31 2007. An analy

E8-5 Hachey Company has accounts receivable of $95100 at March 31 2007. An analysis of the accounts shows these amounts. Balance March 31 Month of Sale 2007 2006 March $65000 $75000 February 12600 8000 December and January 10100 2400 November and October 7400 1100 $95100 $86500 Credit terms are 2/10 n/30. At March 31 2007 there is a $2200 credit balance in Allowance for Doubtful Accounts prior to adjustment. The company uses the percentage of receivables basis for estimating uncollectible accounts. The companys estimates of bad debts are as shown on page 402. Reporting and Analyzing Receivables Estimated Percentage Age of Accounts Uncollectible Current 2% 130 days past due 7 3190 days past due 30 Over 90 days 50 Instructions (a) Determine the total estimated uncollectibles. (b) Prepare the adjusting entry at March 31 2007 to record bad debts expense. (c) Discuss the implications of the changes in the aging schedule from 2006 to 2007.

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