Can someone explain how to report allowance for doubtful acts at yr end?

Question

01/01/07 - beg balance in Allowance.. $12000

During 2007 wrote off 8640 of accts and collected 2520 on accts previously written off. The bal in A/R was 240000 at 1/1 and 288,000 at 12/31. At 12/31, estimates that 5% of A/R will prove to be uncollectible. What should the Allowance for doubtful Accts be reported at on 12/31? I have a several of these ?? Yikes!

Answer 1

1/1/07      12,000 beginning balance for allowance

               240,000 Acc/Rec

during year  Allowance for DD    8640

                                Acc/Rec                    8640

reinstate receivables for collections on previous write-offs

                     Acc/Rec                    2520

                                Allowance for DD     2520

                     Cash                          2520

                                Acc/Rec                     2520

estimate of allowance for bad debt

5% x $288,000 = $14,400

Starting balance = $12,000

so adjusting journal entry:

                      Bad debt expense   2400

                                Allowance for doubtful debt    2400

hence balance of Allowance at year end

= 12000 + 2400 - 8640 + 2520

= $8280

i think thats right ;)