Questions: Carla Vista Company has accounts receivable of 92,600 at March 31, 2025. Credit terms are 2/10, n/30. At March 31, 2025, there is a 2,100 credit balance in Allowance for Doubtful Accounts prior to adjustment. The company uses the percentage-of-receivables basis for estimating uncollectible accounts. The company's estimates of bad debts are as shown below. Age of Accounts Balance, March 31 2025 Balance, March 31 2024 Estimated Percentage Uncollectible ------------ Current 60,500 77,250 2% 1-30 days past due 14,000 7,550 5% 31-90 days past due 10,100 2,370 28% Over 90 days past due 8,000 1,170 52% , 92,600 88,340

To determine the required adjustment to the Allowance for Doubtful Accounts, we need to calculate the estimated uncollectible accounts based on the given percentages for each age category of accounts receivable. Here are the steps:

1. Calculate the estimated uncollectible amount for each age category:

   • Current: \[ \$60,500 \times 2\% = \$1,210 \]

   • 1-30 days past due: \[ \$14,000 \times 5\% = \$700 \]

   • 31-90 days past due: \[ \$10,100 \times 28\% = \$2,828 \]

   • Over 90 days past due: \[ \$8,000 \times 52\% = \$4,160 \]

2. Sum the estimated uncollectible amounts: \[ \$1,210 + \$700 + \$2,828 + \$4,160 = \$8,898 \]

3. Determine the required adjustment:

   The current balance in the Allowance for Doubtful Accounts is a credit of \$2,100. The estimated uncollectible accounts total \$8,898. Therefore, the required adjustment to the Allowance for Doubtful Accounts is: \[ \$8,898 - \$2,100 = \$6,798 \]

Summary: The required adjustment to the Allowance for Doubtful Accounts is \$6,798. This adjustment will increase the allowance to the estimated uncollectible amount of \$8,898.