Question

At December 31, 2018, the Accounts Receivable balance of Alpha Company is $180,000. The Allowance for Bad Debts account has a $12,390 debit balance. Alpha Company prepares the following aging schedule for its accounts receivable: (Click the lcon to view the aging schedule.) Read the reauirements Requirement 1. Journalize the year-end adjusting entry for bad debts on the basis of the aging schedule. Show the T-account for the Allowance for Bad Debts at December 31, 2018. Begin by determining the target balance of Allowance for Bad Debts by using the age of each account Age of Accounts 1-30 31-60 61-90 Total Over 90 Days Days Days Days Balance Accounts Receivable $ 65,000 2.0 % $ 70,000 $ 25,000 20,000 Estimated percent uncollectible 0.7 10.0 % 46.0 % Estimated total uncollectible

Answer 1

Age of Accounts 1-30 Days 31 to 60 days 61 -90 days Over 90 Days Total Accounts Receivables Estimated Precent Uncollectible Estimated total uncollectable 65000 70,000 25000 20000 180000 2.00% 0.70% 10.00% 46.00% 2500 490 1300 9200 13490