Record the journal entry to adjust for the bad debts

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Problem - The Chowdhury Landscaping Company uses the balance sheet method to determine bad debts. The ageing schedule at December 31, 2015 is:

 

Number of Days Outstanding

Total

0-30

31-60

61-90

90-120

> 120

 

Accounts Receivable

20,000

5,000

6,000

2,500

6,000

39,500

Estimated % Uncollectible

2%

3%

6%

12%

25%

 

Estimated Bad Debts

 

 

 

 

 

 

Required -

a. Calculate the total estimated bad debts.

b. If the balance in the Allowance for Doubtful Accounts account is $2,000, record the journal entry to adjust for the bad debts at December 31, 2015.

Reference no: EM132857171

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