Using the data in Exercise 9-11, assume that the allowance for doubtful accounts for Selby's Bike Co. had a debit balance of $7,200 as of December 31, 2016.
Journalize the adjusting entry for uncollectible accounts as of December 31, 2016.
In Exercise 9-11
Selby's Bike Co. is a wholesaler of motorcycle supplies. An aging of the company's accounts receivable on December 31, 2016, and a historical analysis of the percentage of uncollectible accounts in each age category are as follows:
Age Interval _______________Balance Percent ______Uncollectible
Not past due .......................... $1,250,000 ..................... ¾%
1-30 days past due ...................... 500,000 ........................ 3
31-60 days past due .................... 190,000 ........................ 5
61-90 days past due ..................... 60,000 ........................ 15
91-180 days past due ................... 36,000 ........................ 40
Over 180 days past due ................. 24,000 ........................ 80
......................................... $2,060,000
Estimate what the proper balance of the allowance for doubtful accounts should be as of December 31, 2016.