Accounting for uncollectible accounts using the allowance method and reporting receivables on the balance sheet.
At December 31, 2012, the Accounts receivable balance of GPS Technology is $190,000.
The Allowance for doubtful accounts has an $8,600 credit 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 190,000 |
80,000 |
60,000 |
40,000 |
10,000 |
|
Estimated percent uncollectible |
0.4% |
5.0% |
6.0% |
50.0% |
Requirements
1. Journalize the year-end adjusting entry for doubtful accounts on the basis of the aging schedule, Show the T-account for the Allowance for uncollectible accounts at December 31, 2012.
2. Show how GPS Technology will report its net Accounts receivable on its December 31, 2012 balance sheet.