Using the data in Exercise 9-11, assume that the allowance for doubtful accounts for Imperial Bikes Co. had a debit balance of $1,400 as of December 31, 2012.

Journalize the adjusting entry for uncollectible accounts as of December 31, 2012.

Data From 9-11

Imperial Bikes Co. is a wholesaler of motorcycle supplies. An aging of the company’s accounts receivable on December 31, 2012, and a historical analysis of the percentage of uncollectible accounts in each age category are as follows:

Estimate what the proper balance of the allowance for doubtful accounts should be as of December 31, 2012.

Percent Uncollectible Age Interval Not past due 1-30 days past due 31-60 days past due 61-90 days past due 91-180 days past due Over 180 days past due Balance $600,000 120,000 2 60,000 3 45,000 10 40 26,000 24,000 75 $875,000