At December 31, 2014, the Accounts Receivable balance of GPS Technology is $ 190,000. The Allowance for Bad Debts account has a $ 1,600 debit balance. GPS Technology prepares the following aging schedule for its accounts receivable:

Requirements
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, 2014.
2. Show how GPS Technology will report its net accounts receivable on its December 31, 2014, balancesheet.

Transcribed Image Text:

Age of Accounts Accounts Receivable $190,000 Estimated percent uncollectible 1-30 Days $80,000 0.4% 31-60 Days 61-90 Days Over 90 Days $10,000 50.0% $60,000 $40,000 5,0% 6.0%