Chapter 9, Problem E9.20E

Accounting for uncollectible accounts using the allowance method (aging-of-receivables) and reporting receivables on the balance sheet

Learning Objective 3 2. Allowance CR Bal. $25,360

At December 31, 2018, the Accounts Receivable balance of GPS Technology is $200,000. The Allowance for Bad Debts account has a $24. 110 debit balance GPS Technology prepares the following aging schedule for its accounts receivable:

	Age of Accounts
	1-30 Days 31-60 Days 61-90 Days Over 90 Days
Accounts Receivable Estimated percent uncollectible	S 65.000 $ 50,000 $ 40,000 $ 45,000 0.4% 3.0% 5.0% 48.0%

Requirements
1. Journalize the year-end adjusting entry for bad debts on the basis of the aging schedule. Show the T-account for the Allowance for Bad Debts at December 31, 2018.
2. Show how GPS Technology will report its net accounts receivable on its December 31, 2018, balance sheet.