Question

Entry for Uncollectible Accounts

Outlaw Bike Co. is a wholesaler of motorcycle supplies. An aging of the company's accounts receivable on December 31 and a historical analysis of the percentage of uncollectible accounts in each age category are given below.

Age Interval	Balance	Estimated Uncollectible Accounts Percent			Estimated Uncollectible Accounts Amount
Not past due	$874,000	3/4	%		$6,555
1-30 days past due	96,100	2			1,922
31-60 days past due	43,700	8			3,496
61-90 days past due	31,500	18			5,670
91-180 days past due	22,700	40			9,080
Over 180 days past due	16,600	80			13,280
Total	$1,084,600				$40,003

Assume that the allowance for doubtful accounts for Outlaw Bike Co. had a debit balance of $7,200 as of December 31.

Journalize the adjusting entry for uncollectible accounts as of December 31. If an amount box does not require an entry, leave it blank.

Dec. 31

Answer 1

Answer

--Journal entry

Date	Accounts title	Debit	Credit
31-Dec	Bad Debt Expense (or Uncollectible account expense)	$47,203
	Allowance for Doubtful Accounts ($40003 credit required + $ 7200 debit balance existing)		$47,203
	(to record uncollectible accounts)