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Wildhorse Co
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
Expert Solution
| Total | 0-30 | 31-60 | 61-90 | 91-120 | Over 120 days | |
| Account receivable | 489000 | 318000 | 91000 | 45000 | 23000 | 12000 |
| % Uncollectible | 1% | 4% | 5% | 9% | 11% | |
| Amount uncollectible | 12460 | 3180 | 3640 | 2250 | 2070 | 1320 |
Year-end adjusting journal entry to record the bad debts using the aged uncollectible accounts receivable:
| Date | Account Titles and Explantion | Debit | Credit |
| Bad Debt Expense ($12,460+$3,700) | 16160 | ||
| Allowance for Doubtful Accounts | 16160 | ||
| (To record bad debt expense) |
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