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  • Mar 9, 2013, 12:19 PM
    hutchinm
    accounts receivable aging method
    Hi,
    My question is how do I calculate the ending balance of the allowance for uncollectible accounts using the accounts receivable aging method?

    I am given A/R debit balance of $40,000, Allowance for Uncollectible Accounts has credit balance of $2,000. Net sales for the year $250,000. #% of net sales have proven uncollectible in the past. Aging of A/R accounts results in an estimate of $9,000.

    My attempt at this problem is as follows-

    $40,000 X 0.03 = $1,200
    $1,200 debits to Uncollectible Accounts Expense
    $1,200 credits to Allowance for Uncollectible Accounts
    Current credit balance of $2000
    Adjusting entry of $800 to bring current balance?

    Confused from here, please help

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