At December 31, 2016, the Accounts Receivable balance of TM Manufacturer is $230,000. The Allowance for Bad Debts account has a $24,000 debit balance. TM Manufacturer prepares the following aging schedule for its accounts receivable:

Requirements
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, 2016.
2. Show how TM Manufacturer will report its net accounts receivable on its December 31, 2016, balance sheet.

Transcribed Image Text:

Age of Accounts 1-30 Days 31-60 Days 61-90 Days ver 90 Days 75,000 80,000 4.0% 35,000 6.0% $40,000 48.0% Accounts Receivable Estimated percent uncollectible 0.8%