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Wildhorse Co

Accounting

Wildhorse Co. uses the allowance method of accounting for bad debts. The company produced the following aging of the accounts receivable at year-end.

 

(a) Total 0-30 31-60 61-90 91-120 Over 120

Accounts receivable $489,000 $318,000 $91,000 $45,000 $23,000 $12,000

% uncollectible 1% 4% 5% 9% 11%

Estimated bad debts $ $ 3180 $ 3180 $ $ $

 

(b) Prepare the year-end adjusting journal entry to record the bad debts using the aged uncollectible accounts receivable determined above. Assume the unadjusted balance in Allowance for Doubtful Accounts is a $3,700 debit. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Account Titles and Explanation Debit Credit

Bad Debt Expense

Allowance for Doubtful Accounts

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