At December 31, 2018, the Accounts Receivable balance of GPC Technology is $200,000. The Allowance for Bad Debts account has a $11,020 debit balance. GPC Technology prepares the following aging schedule for its accounts receivable: Begin by determining the target balance of Allowance for Bad Debts by using the age of each account

Total Age of Accounts 31-60 61-90 Days Days $ 65,000 $ 55,000 5.0 7.0 1-30 Days 70,000 0.6 % Balance Over 90 Days $ 10,000 50.00

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 GPC Technology will report its net accounts receivable on its December 31, 2018, balance sheet.

Question

Geovanni Wilkerson

Business

10 April, 07:27

At December 31, 2018, the Accounts Receivable balance of GPC Technology is $200,000. The Allowance for Bad Debts account has a $11,020 debit balance. GPC Technology prepares the following aging schedule for its accounts receivable: Begin by determining the target balance of Allowance for Bad Debts by using the age of each account

Total Age of Accounts 31-60 61-90 Days Days $ 65,000 $ 55,000 5.0 7.0 1-30 Days 70,000 0.6 % Balance Over 90 Days $ 10,000 50.00

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 GPC Technology will report its net accounts receivable on its December 31, 2018, balance sheet.

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Ginger · Answer 1

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}

Dr Bad debt expense 23,540

Cr Allowance for doubtful accounts 23,540

2. Show how GPC Technology will report its net accounts receivable on its December 31, 2018, balance sheet.

Accounts receivable $200,000

Allowance for doubtful accounts ($12,520)

Net accounts receivable $187,480

Explanation:

Total Age of Accounts

1-30 Days $70,000 x 0.6 % = $420

31-60 Days $65,000 x 5% = $3,250

61-90 Days $55,000 x 7% = $3,850

Balance Over 90 Days $10,000 x 50% = $5,000

total $12,520 + $11,020 (debit balance) = $23,540