Net Accounts Receivable: Aging of Receivables Method

The Aging-of-Receivables Method helps us calculate the ending balance in the Allowance for Doubtful Accounts. We will have to use our BASE formula or T-account to calculate the Bad Debt Expense.

Concept: Net Accounts Receivable: Aging of Receivables Method

8m

Problem: A company has gross accounts receivable totaling $150,000. The company uses the aging-of-receivables method to estimate the allowance for doubtful accounts. The company estimates that the amount of uncollectible receivables will be $3,600. Currently, the allowance for doubtful accounts has a debit balance of $800. What is the journal entry to record this year’s bad debt expense?

4m

Net Accounts Receivable: Aging of Receivables Method Additional Practice Problems

The unadjusted debit balance of the Allowance for Doubtful Accounts account is $350. Uncollectible accounts are estimated to be $15,800, based on an analysis of a schedule of aging of accounts receivable. After recording the appropriate journal entry for the bad debts expense, what will be the balance of the Bad Debt Expense account?

a. $15,800

b. $15,450

c. $16,150

d. $350

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The unadjusted credit balance of the Allowance for Doubtful Accounts account is $650. Uncollectible accounts are estimated to be $15,600, based on an analysis of a schedule of aging of accounts receivable. After recording the appropriate journal entry for the bad debts expense, what will be the adjusted balance of the Allowance for Doubtful Accounts?

a. $650

b. $16,250

c. $14,950

d. $15,600

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Upon completing an aging analysis of accounts receivable, the accountant for Rosco Works estimated that $5,000 of the current $98,000 of accounts receivable would be uncollectible. The allowance for doubtful accounts had a $400 debit balance at year-end prior to adjustment. The amount of bad debt expense that should be included in Rosco's income statement for the year is 

a. $5,000.

b. $5,400.

c. $4,600.

d. $0.

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The accounts receivable balance for Pentil Inc. at year-end is $100,000. Before calculating and recording this year's bad debt expense, the Allowance for Doubtful accounts has a credit balance of $500. Credit sales for the year are $1,500,000. Historically, 1% of credit sales have not been collected. An aging of accounts receivable has resulted in an estimate that $16,000 of the year-end accounts receivable balance is uncollectible. Using the aging of accounts receivable method, the adjusted balance in the allowance for doubtful accounts at year-end will be:

a. $500

b. $16,500

c. $16,000

d. $15,000

e. $15,500

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When using the percentage of receivables method to record bad debts, $10,000 are estimated uncollectible. If the balance of the Allowance for Doubtful Accounts is $2,000 debit before adjustment, what is the balance after adjustment?

a. $10,000

b. $12,000

c. $8,000

d. $2,000

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J Company ended last year with balances in Accounts Receivable and Allowance for Doubtful Accounts of $46,000 and $1,800, respectively. During the year, J Company wrote off $3,000 of Uncollectible Accounts. After aging its receivables, J Company estimates that the ending Allowance for Doubtful Accounts balance should be $3,200. What will J Company report as Uncollectible Accounts Expense on its income statement?

a. $3,200

b. $4,400

c. $1,400

d. $3,000

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