Chapter 9, Problem 9.10EX

Adjustment for uncollectible accounts

Using data in Exercise 9-9, assume that the allowance for doubtful accounts for Waddell Industries has a credit balance of $6,350 before adjustment on August 31. Journalize the adjusting entry for uncollectible accounts as of August 31.

Reference:

EX 9-9 Estimating allowance for doubtful accounts OBJ. 4

Waddell Industries has a past history of uncollectible accounts, as follows. Estimate the allowance for doubtful accounts, based on the aging of receivables schedule you completed in Exercise 9-8.

Age Class	Percent Uncollectible
Not past due	3%
1-30 days past due	4
31-60 days past due	15
61-90 days past due	35
Over 90 days past due	80

EX 9-8 Aging of receivables schedule OBJ. 4

The accounts receivable clerk for Waddell Industries prepared the following partially completed aging of receivables schedule as of the end of business on August 31:

The following accounts were unintentionally omitted from the aging schedule and not included in the preceding subtotals:

Customer	Balance	Due Date
Builders Industries	$44,500	May 1
Elkhorn Company	21,000	June 20
Granite Creek Inc.	7,500	July 13
Lockwood Company	14,000	September 9
Teton Company	13,000	August 7

a. Determine the number of days past due for each of the preceding accounts as of August 31.

b. Complete the aging of receivables schedule by adding the omitted accounts to the bottom of the schedule and updating the totals.