Question

Splish Brothers Inc. uses the allowance method of accounting for bad debts. The company produced the following aging of the accounts receivable at year-end.

(a)- ANSWERED- SCROLL TO QUESTION B

Correct answer iconYour answer is correct.

Calculate the total estimated bad debts based on the information below.

				Number of Days Outstanding
		Total		0–30		31–60		61–90		91–120		Over 120
Accounts receivable		$538,000		$374,000		$88,000		$40,000		$24,000		$12,000
% uncollectible				1%		4%		5%		7%		11%
Estimated bad debts		$enter estimated bad debts in dollars		$enter estimated bad debts in dollars		$enter estimated bad debts in dollars		$enter estimated bad debts in dollars		$enter estimated bad debts in dollars		$enter estimated bad debts in dollars

B. Prepare the year-end adjusting journal entry to record the bad debts using the aged uncollectible accounts receivable determined above. Assume the unadjusted balance in Allowance for Doubtful Accounts is a $3,800 debit. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Answer 1

		Number of Days Outstanding
	Total	0–30	31–60	61–90	91–120	Over 120
Accounts receivable	538,000	374,000	88,000	40,000	24,000	12,000
% uncollectible		1%	4%	5%	7%	11%
Estimated bad debts	12,260	3,740	3,520	2,000	1,680	1,320
Accounts NAME	Debit	Credit
Bad debt Expense	16,060		(12260 + 3800)
Allowance for doubtful accounts		16,060
(To record bad debt expense)