Prepare the year-end adjusting entry to record bad debts expense under the assumption that the Allowance for Doubtful Accounts has

Mazie Supply Co. uses the percent of accounts receivable method. On December 31, it has outstanding accounts receivable of $148,000, and it estimates that 5% will be uncollectible.

Prepare the year-end adjusting entry to record bad debts expense under the assumption that the Allowance for Doubtful Accounts has:

(a) a $2,516 credit balance before the adjustment.

(b) a $740 debit balance before the adjustment.

Solutions

Expert Solution

		Debit	Credit
a	Bad Debts expense	4884		=(148000*5%)-2516
	Allowance for Doubtful Accounts		4884

b	Bad Debts expense	8140		=(148000*5%)+740
	Allowance for Doubtful Accounts		8140

ekkarill92 answered 2 years ago

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