Chapter 9, Problem S9.8SE

Applying the allowance method (aging-of-receivables) to account for uncollectibles
Learning Objective 3
Surf and Sun had the following balances at December 31, 2018, before the yearend adjustments:

The aging of accounts receivable yields the following data:

Age of Accounts Receivable
	0-60 Days	Over 60 Days	Total Receivables
Accounts Receivable	$78,000	$3,000	$81,000
Estimated percent uncollectible	×2%	×23%

Requirements

1. Journalize Surf and Sun's entry to record bad debts expense for 2018 using the aging-of-receivables method.
2. Prepare a T-account to compute the ending balance of Allowance for Bad Debts.