Attachment 1Attachment 2Problem 774 From its ?rst day of operations to December 31, 2017, Bramble Corp. provided for uncollectible accounts receivable under the allowance method: entries for bad debt expense were made monthly based on2.40% of credit sales, bad debts that were written off were charged to the allowance account, recoveries of bad debts previously written off were credited to the allowance account, and no year-endadjustments were made to the allowance account. Bramble’s usual credit terms were net 30 days. and remain unchanged. The balance in Allowance for Doubtful Accounts was $183,600 at January 1., 2017. During 2017, credit sales totalled $9.25 million, interim entries for bad debt expense were based on 2.40% of credit sales.$94,500 of bad debts were written off, and recoveries of accounts previously written off amounted to $14,800. Bramble upgraded its computer facility in November 2017, and an aging of accounts receivable was prepared for the ?rst time as at December 3]., 2017.A summary of the aging analysis follows: Classi?ca?on by Month ofSale Balance in Each Category Estimated My llncolleclible Novem berDecember 2017 $ 1,086,000 8% July-October 2017 646,000 12.8% January-June 2011′ 418,500 22% Before January 1, 201? 147,000 59%$2,297,500 Based on a review of how collectible the accounts really are in the Before January 1, 2017" aging category, additional receivables totalling $67,400 were written off as at December 31, 2017. The 59%uncollectible estimate therefore only applies to the remaining $79,600 in the category. Finally, beginning with the year ended December 31, 2017, Bramble adopted a new accounting method for estimating the allowance for doubtful accounts: it now uses the amount indicated by the year-end aging analysis of accounts receivable.
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