Prepare the journal entry to record the estimated uncollectibles. (Assume an unadjusted balance of zero in Allowance for Doubtful Accounts.) (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Account Titles and Explanation

Bad debt expense debit: 18,000

Allowance for doubtful accounts credit: 18,000

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(b) Prepare the current assets section of the balance sheet for Gehrig Company, assuming that in addition to the receivables it has cash of $90,000, merchandise inventory of $180,000, and supplies of $13,000. (List current assets in order of liquidity)

GEHRIG COMPANY Balance Sheet (partial)

December 31, 2010