Erickson Company had net credit sales of $3,000,000 and a $300 credit balance in Allowance for Doubtful Accounts at December 31, 2017, before the current year's provision for uncollectible accounts. An aging of the accounts receivable revealed the following: Estimated Percentage Uncollectible
Current Accounts $170,000 1%
1 - 30 days past due 15,000 3%
31 - 60 days past due 12,000 6%
61 - 90 days past due 5,000 15%
Over 90 days past due 9,000 30%
Total Accounts Receivable $211,000
Instructions:
(a) Prepare the adjusting entry on December 31, 2017, to recognize bad debts expense.
(b) Assume the same facts as above except that the Allowance for Doubtful Accounts account had a $300 debit balance before the current year's provision for uncollectible accounts. Prepare the adjusting entry for the current year's provision for uncollectible accounts.