Question

At December 31, 2018, the Accounts Receivable balance of Austin Technology Group is $230,000. The Allowance for Bad Debts account has a $6,190 debit balance. Austin Technology Group prepares the following aging schedule for its accounts receivable: (Click the icon to view the aging schedule.) Read the requirements. Requirement 1. Journalize the year-end adjusting entry for bad debts on the basis of the aging schedule. Show the T-account for the Allowance for Bad Debts at December 31, 2018. i Requirements Begin by determining the target balance of Allowance for Bad Debts by using the age of each account. Age of Accounts Total Balance 1-30 Days 95,000 0.2% 31-60 Days $ 85,000 3.0 % 61-90 Days $ 45,000 5.00% Over 90 Days $ 5,000 49.0 1. Journalize the year-end adjusting entry for bad debts on the basis of the aging schedule. Show the T-account for the Allowance for Bad Debts at December 31, 2018 2. Show how Austin Technology Group will report its net accounts receivable on its December 31, 2018, balance sheet. $ Accounts Receivable Estimated percent uncollectible Print Done Estimated total uncollectible Journalize the year-end adjusting entry for doubtful accounts on the basis of the aging schedule. (Record debits first, then credits. Select the explanation on the last line of the journal entry table.) Date Accounts and Explanation Debit Credit Dec. 31 i Data Table Age of Accounts $ 1-30 Days 95,000 0.2% 31-60 Days $ 85,000 3.0 % Over 90 Days $ 5,000 Accounts Receivable Estimated percent uncollectible 61-90 Days $ 45,000 5.0 % Show the T-account for the Allowance for Bad Debts at December 31, 2018. 49.0 % Allowance for Bad Debts Print Print Done Done

Answer 1

31-60 days $ Accounts Receivable Estimated percent uncollectible Estimated total uncollectible 1-30 days $ 95,000 0.20% $ 190 Age of accounts 61-90 days Over 90 days Total 85,000 $ 45,000 $ 5,000 $230,000 A 3.00% 5.00% 49.00% 2,550 $ 2.250 $ 2,450 $ 7,440 A*B $ Opening debit balance of allowance for doubtful debts Add: Closing provision balance required as per ageing Provision required to be created $ $ $ 6,190 7,440 13,630 Credit Accounts tittle Bad debts expense Allowance for doubtful debts $ Debit 13,630 13,630 $ 13,630 Beginning Ending balance Allowance for doubtful debts 6,190 Bad debts expense $ 7,440 $ 13,630 $ 13,630 Balance sheet (Partial) Accounts receivable Less: Allowance for doubtful debts Net accounts receivable $ 230,000 $ 7,440 S222,560