Estimating Bad Debts Expense and Reporting of Receivables (FSET)

At December 31, Sunil Company had a balance of $1,687,500 in its accounts receivable and an unused (unadjusted year-end) balance of $18,900 in its allowance for uncollectible accounts. The company then aged its accounts as follows:

Current	$1,368,000
060 days past due	198,000
61180 days past due	81,000
Over 180 days past due	40,500
Total accounts receivable	$1,687,500

The company has experienced losses as follows: 1% of current balances, 5% of balances 060 days past due, 15% of balances 61180 days past due, and 40% of balances over 180 days past due. The company continues to base its provision for credit losses on this aging analysis and percentages.

a. What amount of bad debts expense does Sunil report on its annual income statement? 33,030

b. Show how accounts receivable and the allowance for uncollectible accounts are reported in its December 31 balance sheet. Note: Do not use negative signs with your answers.

Balance Sheet (excerpt)
Current Assets
Accounts receivable	1687500
Less: Allowance for uncollectible accounts	519300
Accounts receivable, net	1635570

c. Report the increase in bad debt expense calculated in part a using the financial statement effects template. Note: Use negative signs with your answers, when appropriate.

	Balance Sheet														Income Statement
	Cash		Noncash		Contra				Contributed		Earned								Net
Transaction	Asset	+	Assets	-	Assets	=	Liabilities	+	Capital	+	Capital				Revenues	-	Expenses	=	Income
Recognize bad debts expense.	Answer		Answer		Answer		Answer		Answer		Answer				Answer		Answer		Answer

PLEASE HELP WITH THE BALANCE SHEET