Question

Problem III (5 bonus points): The Broad Company had a $600 credit balance in Allowance for Doubtful Accounts at December 31, 2016, before the current year's provision for uncollectible accounts. An aging of the accounts receivable revealed the following: Estimated Percentage Uncollectible Current Accounts $120,000 1-30 days past due 12,000 31-60 days past due 10,000 6% 61-90 days past due 5,000 12% Over 90 days past due 8,000 30% Total Accounts Receivable $155,000 Instructions: Prepare the adjusting entry on December 31, 2016, to recognize bad debts expense. 1% 3%

Answer 1

allowance for doubtful account balance at year end should be

current	120000	1200[120000*1%]
1-30	12000	360[12000*3%]
31-60	10000	600[10000*6%]
61-90	5000	600[5000*12%]
over 90	8000	2400[8000*30%]
	total allowance	5160

bad debt for the year = allowance for doubtful fro year - beginning balance

=5160-600

=4560$

journal

Date	account	debit	credit
December 31,2016	bad debts expense	4560
	allowance for doubtful account		4560