Question

Baltimore Company uses aging to estimate uncollectibles.  At the end of the fiscal year, December 31, 2018, Accounts Receivable has a balance that consists of:

Dollar Value	Age of Account	Estimated Collectible
$155,000	< 30 days old	99%
75,000	30 to 60 days old	93%
25,000	61 to 120 days old	70%
10,000	> 120 days old	19%

The current unadjusted Allowance for Uncollectible Accounts balance is a debit balance of $2,000 and the Bad Debt Expense accounts has an unadjusted balance of zero. After the adjusting entry is made, what will be the dollar balances in the Allowance for Doubtful Accounts? Round to nearest whole dollar.

Answer 1

Calculate balance

Days	Amount	% Uncollectible	$ Uncollectible
< 30 days old	155000	1%	1550
30 to 60 days old	75000	7%	5250
61 to 120 days old	25000	30%	7500
> 120 days old	10000	81%	8100
Total			22400

Dollar balance in allowance for doubtful accounts = $22400