Question

The Physical Therapy Center specializes in helping patients regain motor skills after serious accidents. The center has the following balances on December 31, 2021, before any adjustment Accounts Receivable = $94.000, Allowance for Uncollectible Accounts $2,400 (debit). The center estimates uncollectible accounts based on an aging of accounts receivable as shown below.

Age Group	Amount Receivable	Estimated Percent Uncollectible
Not yet due	$ 44,000	5%
0 - 60 days past due	24,400	20%
61-120 days past due	14,400	30%
More than 120 days past due	11,200	85%
Total	$ 94,000

Required:

 1. Estimate the amount of uncollectible receivables. 

Age Group	Estimated Amount Uncollectible
Not yet due
0-60 days past due
61-120 days past due
More than 120 days past due
Total

2. Record the adjusting entry for uncollectible accounts on December 31, 2021. (If no entry is required for a particular transaction/event, select "No Journal Entry Required in the first account field.) 

3. Calculate net accounts receivable

Answer 1

1) Estimated amount of uncollectible

	Estimated amount of uncollectible
Not yet due	2200
0-60 days	4880
61-120 days	4320
Over 120 days	9520
Total	20920

2) Adjusting entry

Date	account and explanation	Debit	Credit
Dec 31	Bad debt expense (20920+2400)	23320
	Allowance for doubtful accounts		23320

3) Balance sheet presentation

Total account receivable	94000
Less: Allowance for doubtful accounts	-20920
New account receivable	73080