An aging schedule anchors this AC116 Unit 3 allowance estimation exercise: a rate per past-due band, a reason for each rate, and an entry sized to the gap. Searches like "ac 116 unit 3 assignment example", "ac116 unit 3 sample" and "ac116 unit 3 example" land here.
What a finished AC116 Unit 3 allowance estimation exercise looks like
The centerpiece is a grid with one row per customer, or per customer group, and five balance columns: current, one to thirty days past due, thirty-one to sixty, sixty-one to ninety, and beyond ninety. Column totals run along the bottom and cross-foot to the receivable's ledger balance, which is the first check a grader performs. Beneath the grid sits a smaller table with one line per band: the band total, the loss percentage applied, and the estimated uncollectible amount. Those amounts sum to the balance the allowance should hold at period end. A short paragraph then compares that target with the allowance's current balance, and the adjusting entry books the difference. The percentages rise from band to band, and each carries a one-sentence reason drawn from the problem's facts.
How a AC116 Unit 3 example is structured
The grid comes first because every later figure is drawn from its column totals. The rate table follows, ordered from the youngest band to the oldest so the rising percentages read as a pattern rather than a list. Each rate's defense sits in the table's final column, kept to one sentence: prior loss experience for the band, a named customer in distress that justifies a higher figure, or a credit policy change the problem mentions. After the rates comes the reconciliation. It starts from the required balance, subtracts an existing credit balance or adds an existing debit balance, and arrives at the expense for the period. The journal entry closes the exercise, followed in some sections by a sentence contrasting this balance sheet approach with estimating from a percentage of credit sales, which targets the expense rather than the ending balance.
Five past-due bands
Customer balances spread from not yet due through over 90 days, with column totals cross-footed to the receivable's ledger balance before anything is estimated.
A rate that rises with age
Each band's percentage is larger than the one before it. The sample states the pattern once, since an older balance is less likely to be collected.
One sentence per rate
Loss history, a customer who has stopped answering, a tightened credit policy. The defense column ties each percentage to a fact the problem supplied rather than to a guess.
From target balance to expense
Required allowance less the existing credit balance, or plus an existing debit balance, gives the amount to record. The arithmetic is shown on its own three lines.
The adjusting entry
Bad Debt Expense debited and the allowance credited for the computed gap, dated at period end, with the resulting allowance balance restated beneath the entry as proof.
Where marks go in AC116 Unit 3
Most of the points lost here trace to one move: the aging total booked straight to expense, ignoring whatever balance the allowance already carried. The ending allowance then misses its target by exactly that carried amount, and a grader who checks the T-account finds it at once. A debit balance treated as a credit balance is the mirror image of that error and costs as much. Next comes a grid whose columns do not cross-foot to the ledger, which undermines every percentage applied below it. Rates offered without any reason lose the judgment points the unit singles out. Rates that fall as balances age read as a misunderstanding of the method. Smaller deductions go to an entry with no date or to percentages applied to the wrong band.
Get a AC116 Unit 3 example written to your instructions
Send the customer list and aging data from Unit 3's problem along with the rubric and whatever instructions came with it. Each band's rate is defended against the facts your problem supplies, not a generic loss table, and the reconciliation starts from whatever allowance balance the problem states. The first custom sample, returned within 24-48h, costs nothing.
AC116 Unit 3 questions, answered
What if the problem gives the loss percentages already?
Then the defense column changes job. Instead of justifying a chosen rate, it explains why the given rates rise with age and flags any band where the stated figure looks out of line with the facts, such as a large customer known to be in trouble. Many AC116 problems supply rates for most bands and leave one open, which is where the reasoning marks sit.
Why is the expense different from the aging total?
Because the aging schedule produces the balance the allowance should end the period holding, not the expense for the period. Whatever the allowance already holds, from last period's estimate less this period's write offs, has to be accounted for. The expense is the adjustment that moves the existing balance to the target, which is why the reconciliation lines matter.
Is the percentage-of-sales method ever used in this exercise?
Some sections pair the two. Under the percentage-of-sales approach, the rate times credit sales is itself the expense, and the existing allowance balance is ignored when computing it. The aging approach targets the balance sheet figure instead. When a problem asks for both, the finished sample places the two results side by side and states which produces the larger expense and why.