E9-19 Accounting for uncollectible accounts using the allowance method (aging-of-receivables) and reporting receivables on the balance sheet At December 31, 2014, the Accounts Receivable 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 Accounts 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 Debts at December 31, 2014. 2. Show how GPS Technology will report its net accounts receivable on its December 31, 2014, balance sheet.

Accounts Receivable Percent uncollectible Estimated total uncollectible 1 - 30 Days $80,000 0.4% Age of Accounts Receivable 31 - 60 Days 61 - 90 Days $60,000 $40,000 5.0% 6.0% Remember to calculate these Date Accounts and Explanation 2014 Dec. 31 Available accounts for journal entry: Bad Debts Expense Allowance for Bad Debts Debit Credit Over 90 Days $10,000 50.0% Total Receivables $190,000 Allowance for Bad Debts Bal 1,600 expense Bal GPS TECHNOLOGY Balance SheetPartial December 31, 2014 Assets Current Assets: Accounts Receivable Less: Allowance for Bad Debts