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EXERCISE 5 Molina Company had a $700 credit balance in Allowance for Doubtful Accounts at December...

EXERCISE 5

Molina Company had a $700 credit balance in Allowance for Doubtful Accounts at December 31, 2015, before the current year's provision for uncollectible accounts. An aging of the accounts receivable revealed the following:

                                                                                                                       Estimated Percentage

                                                                                                                      Uncollectible                                                                                        

         Current Accounts                                            $120,000            1%

         1–30 days past due                                            20,000            3%

         31–60 days past due                                          10,000            6%

         61–90 days past due                                          10,000          12%

         Over 90 days past due                                         8,000          30%

         Total Accounts Receivable                             $168,000

Instructions

(a)   Determine the amount to recognize as bad debt expense on December 31, 2015.

(b)   Assume the same facts as above except that the Allowance for Doubtful Accounts account had a $500 debit balance before the current year's provision for uncollectible accounts. What is the amount of bad debt expense to recognize for the year

(c)What is the amount that is reported as the net balance for Accounts Receivable as of December 31, 2015?

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