On janurary 31, 2014, the accounts receivable balance of Advanced Automotive technology is $270,000. The allowance for uncollectible accounts has a $4,100 credit balance. Advanced automotive technology prepares the following aging schedule for accounts receivable:

1-30 Days 31-60 Days 61-90 Days Over 60 days

Accounts Receivable $120,000 $75,000 $65,000 $10,000

Estimated Percentage Uncollectible 0.4% 2.0% 10.0% 45%

Requirements

1. Journalize the year-end adjusting entry for uncollectible accounts on the basis of the aging schedule. Calculate the resulting ending balance of the allowance account based on the account aging. Show the t-account for the allowance on Jan 31, 2014.

Excercise template

Journal?

Computations?

Balance needed in allowance account:

Adjusting entry amount:

Allowance for uncollectible accounts

2. Assume that instead of a $4,100 credit balance, there is a $900 debit balance in the allowance account prior to adjustment. Journalize the year-end adjusting entry for uncollectible accounts on the basis of the aging schedule. Calculate the resulting ending balance of the allwance account based on the account aging. Show the t-account for the allowance on Jan 31, 2014

Excercise template

Journal?

Computations?

Allowance for uncollectible accounts?