Question
E9-19 Accounting for uncollectible accounts using the allowance method (age-of-receivables) and reporting receivables on the balance sheet At december 31, 2014, the account receivables balance
E9-19 Accounting for uncollectible accounts using the allowance method (age-of-receivables) and reporting receivables on the balance sheet
At december 31, 2014, the account receivables balance of GPS technology is $190,000. The allowance for bad debts account has a $1,600 debit balance. GPS technology prepares the following aging schedule for its accounts receivable:
Age of accounts
Account receivable 1-30 days 31-60 days 61-90 days over 90 days
$190,000 $80,000 $60,000 $40,000 $10,000
Estimated percent uncollectible 0.4% 5.0 % 6.0% 50.0%
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 Debt at December 31, 2014.
2. Show how GPS Technology will report its net accounts receivable on its December 31,2014, balance sheet.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started