Net Zero Products, a wholesaler of sustainable raw materials. Prepared the following aging of receivables analysis. Days Past Due
Total 0 1 to 30 31 to 60 61 to 90 Over 90
Accounts receivable $115,200 $80,000 $18,000 $7,200 $4,000 $6,000
Percent uncollectible 1% 3% 5% 8% 11%
1. Estimate the balance of the Allowance for Doubtful Accounts using the aging of accounts receivable method.
2. Prepare the adjusting entry to record bad debts expense assuming the unadjusted balance in the Allowance for Doubtful Accounts is a $1,000 credit.
3. Prepare the adjusting entry to record bad debts expense using the estimate from part a. Assume the unadjusted balance in the Allowance for Doubtful Accounts is a $100 debit.