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%
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.