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 #1: Net Accounts Receivable: Aging of Receivables Method

Practice: 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?

Additional Problems
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
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
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
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
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.
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