At December 31, 2018, the Accounts Receivable balance of GPC Technology is $200,000. The Allowance for Bad Debts account has a $11,020 debit balance. GPC Technology prepares the following aging schedule for its accounts receivable: Begin by determining the target balance of Allowance for Bad Debts by using the age of each account Total Age of Accounts 31-60 61-90 Days Days $ 65,000 $ 55,000 5.0 7.0 1-30 Days 70,000 0.6 % Balance Over 90 Days $ 10,000 50.00
1. Journalize the year-end adjusting entry for bad debts on the basis of the aging schedule. Show the T-account for the Allowance for Bad Debts at December 31, 2018
2. Show how GPC Technology will report its net accounts receivable on its December 31, 2018, balance sheet.