Question

net zero products, a wholesaler of sustainable raw materials, prepares the following aging of receivables analysis.

	total	days past due	days past due	days past due	days past due	days past due
accounts receivable	$ 185,000	$ 100,000	$ 38,000	$ 17,000	$ 14,000	$ 16,000
percent uncollectible		1%	2%	4%	6%	10%

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required 1 required 2

prepare the adjusting entry to record bad debts expense assuming the unadjusted balance in the allowance for doubtful accounts is a $3,000 credit.

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journal entry worksheet

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record estimated bad debts assuming that allowance for doubtful accounts
has a $3,000 credit balance.

note: enter debits before credits.

date	general journal	debit	credit

Explanation:

Step1: Calculate Estimated Uncollectible

For each category:

• 0 days: \( \$100,000 \times 1\% = \$1,000 \)
• 1 - 30 days: \( \$38,000 \times 2\% = \$760 \)
• 31 - 60 days: \( \$17,000 \times 4\% = \$680 \)
• 61 - 90 days: \( \$14,000 \times 6\% = \$840 \)
• Over 90 days: \( \$16,000 \times 10\% = \$1,600 \)

Sum these: \( 1,000 + 760 + 680 + 840 + 1,600 = \$4,880 \)

Step2: Determine Bad Debts Expense

Unadjusted allowance is $3,000 credit. Required allowance is $4,880. So bad debts expense = \( 4,880 - 3,000 = \$1,880 \)

Step3: Journal Entry

Debit Bad Debts Expense for $1,880, Credit Allowance for Doubtful Accounts for $1,880.

Answer:

Date	General Journal	Debit	Credit
	Allowance for Doubtful Accounts		1,880