At December 31, 2012, the Accounts receivable balance of Solar Energy Manufacturing (A+ Guaranteed)

At December 31, 2012, the Accounts receivable balance of Solar Energy Manufacturing is $170,000. The Allowance for doubtful accounts has a $10,100 credit balance. Solar Energy Manufacturing prepares the following aging schedule for its accounts receivable:

Accounts Receivable: 1-30 days 31-60 days 61-90 days over 90 days   

$170,000 $70,000 $50,000 $30,000 $20,000

Estimated % uncollectible 0.6% 3.0% 9.0% 40.0%

Requirements
R1.
Journalize the year-end adjusting entry for doubtful accounts on the basis of the aging schedule. Show the T-account for the Allowance for uncollectible accounts at December 31, 2012.
R2. Show how Solar Energy Manufacturing will report Accounts receivable on its December 31, 2012, balance sheet.

Here’s the SOLUTION

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