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At December 31, 2018, the trial balance of Jordan Company contained the following accounts before adjustment Debit Credit Accounts Receivables $1,500,000 Allowance for Doubtful accounts $ 400 Sales Revenue 16,800,000 At December 31, 2018, a company's aging schedule to estimate uncollectable accounts receivable at year end
At December 31, 2018, the trial balance of Jordan Company contained the following accounts before adjustment Debit Credit Accounts Receivables $1,500,000 Allowance for Doubtful accounts $ 400 Sales Revenue 16,800,000 At December 31, 2018, a company's aging schedule to estimate uncollectable accounts receivable at year end. 0-30 31-60 61-90 91-120 over 120 Accounts Receivables $1,250,000 $120,000 $30,000 $40,000 $60,000 Uncollectable % 1% 2% 5% 10% Estimated Bad Debts 8% Instructions Journalize the adjusting entry for bad debts at December 31.2018. 25,200 doubt 25,200
Expert Solution
| 0-30 | 31-60 | 61-90 | 91-120 | >120 | |
| Account Receivable | 1,250,000 | 120,000 | 30,000 | 40,000 | 60,000 |
| Uncollectable % | 1% | 2% | 5% | 8% | 10% |
| Estimated Bad Debt | 12,500 | 2,400 | 1,500 | 3,200 | 6,000 |
So, the total estimated bad debt comes to 25,600.
The Balance of Allowance for doubtful account is $400 Credit. So, additionally the amount needed shall be 25,200.
So, the journal entry to be passed shall be,
| Bad Debt Expense | 25,200 | |
| Allowance for Doubtful Account | 25,200 |
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