Adjustment entry for Allowance for Doubtful accounts at the end of the year .
The Draber Company uses the allowance method based on the aging method to determine the estimated allowance for doubtful accounts. Below is presented an aging at the end of the current period with the percent uncollectible experience rates:
|
|
|
Number of Days Outstanding
|
|
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Total
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0-30 days
|
31-60 days
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61-90 days
|
91-120 days
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Over 120 days
|
|
Accounts Receivable
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$450,000
|
$220,000
|
$100,000
|
$45,000
|
$30,000
|
$55,000
|
|
%uncollectible rate
|
|
2%
|
4%
|
6%
|
8%
|
10%
|
If the allowance for doubtful accounts before any necessary adjustment is at $10,000, what adjustment will have to be made at the end of the period? You may use a journal entry to help answer the question, but this is not required.