Question 9

Kiley Company had a $700 credit balance in Allowance for Doubtful Accounts at December 31, 2008, before the current year's provision for uncollectible accounts. An aging of the accounts receivable revealed the following:

Estimated Percentage Uncollectible

Current Accounts$120,0001%

1-30 days past due12,0003%

31-60 days past due10,0006%

61-90 days past due5,00012%

Over 90 days past due8,00030%

Total Accounts Receivable$155,000

Required:

(a) Prepare the adjusting entry on December 31, 2008, to recognize bad debts expense.

(b) Assume the same facts as above except that the Allowance for Doubtful Accounts account had a $500 debit balance before the current year's provision for uncollectible accounts.

Prepare the adjusting entry for the current year's provision for uncollectible accounts.