Problem: At December 31st, 2007, The Accounts Receivable balance of "Bogus Company" is $300,000. The Allowance for Doubtful Accounts has a $3,900 credit balance. "Bogus Company" prepares the following aging schedule for its accounts receivable.
Age of Accounts:
total balance 1-30 days 31-60 days 61-90 days over 90 days
$30,000 $140,000 $80,000 $70,000 $10,000
estimated percent
uncollectible 0.5% 1.0% 6.0% 50%
Need assistance in:
1) Journalizing the year end adjusting entry for doubtful accounts on the basis of the aging schedule. Show the T-account for the Allowance at December 31st,2007
2) Show how "Bogus Company" will report Accounts Receivable on its December 31st, 2007 balance sheet.