At the end of the year, Mercy Cosmetics' balance of Allowance for Uncollectible Accounts is $600...

At the end of the year, Mercy Cosmetics' balance of Allowance for Uncollectible Accounts is $600 (debit, before adjustment. The balance of Accounts Receivable is $25,000. The company estimates that 12% of accounts will not be collected over the next year.

What is the adjustment Mercy Cosmetics would record for Allowance for Uncollectible Accounts? (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.)

At the end of the year, Mercy Cosmetics balance of Allowance for Uncollectible Accounts is $600 (debit, before adjustment. T

Expert Solution

1)

Estimated Allowance for Uncollectible Accounts ($25,000 × 12%)	$3000
Less: Allowance for Uncollectible Accounts Balance (credit)	( $600)
Adjustment Mercy would record	$ 2400

2) Journal Entry:

Date	Account Name	Debit	Credit
1	Bad debt expense	$2400
	To Allowance for uncollectible accounts		$2400

ekkarill92 answered 3 years ago

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