On December 31, Jarden Co.'s Allowance for Doubtful Accounts has an unadjusted credit balance of $16,500. Jarden prepares a schedule of its December 31 accounts receivable by age. Accounts Receivable Age of Accounts Receivable Expected Percent Uncollectible
$880,000 Not yet due 1.30%
352,000 1 to 30 days past due 2.05
70,400 31 to 60 days past due 6.55
35,200 61 to 90 days past due 33.00
14,080 Over 90 days past due 69.00

Required:
a. Compute the required balance of the Allowance for Douitful Accounts at December 31 using an aging of accounts receivable.
b. Prepare the adjusting entry to record bad debts expense at December 31.

Jarden Co.

a. The required balance of the Allowance for Doubtful Accounts at December 31, using an aging of accounts receivable is:

= $44,598.

b. Adjusting Journal Entry:

Debit Bad Debts Expense $28,098

Credit Allowance for Doubtful Accounts $28,098

To record the bad debts expense and bring the Allowance for Doubtful Accounts to a credit balance of $44,598.

Explanation:

a) Data and Calculations:

Allowance for Doubtful Accounts, credit balance = $16,500

Accounts       Age of Accounts          Expected       Uncollectible

Receivable         Receivable            Uncollectible      Allowance

                                                             Percent  

$880,000          Not yet due                   1.30%    $11,440 ($880,000*1.30%)

 352,000          1 to 30 days past due   2.05         7,216 ($352,000*2.05%)

   70,400          31 to 60 days past due 6.55         4,611 ($70,400*6.55%)

  35,200           61 to 90 days past due 33.00      11,616 ($35,200*33.00%)

  14,080           Over 90 days past due 69.00       9,715 ($14,080*69%)

$1,351,680                                                          $44,598

Adjustment:

Ending balance         $44,598

Beginning balance    $16,500

Bad Debts Expense $28,098

answer; i believe the correct answer is (180)