(Bad Debt Adjustment) The balance in accounts receivable at December 31 was $260,000. The allowance account...

(Bad Debt Adjustment)

The balance in accounts receivable at December 31 was $260,000. The allowance account has a debit balance of $7,500 before the year end adjustment. Sales for the year were $985,000. Prepare the adjusting entry for each of the following independent situations:

a. 3% of outstanding accounts receivable are uncollectible

b. 1.5% of sales are uncollectible

c. An aging of the accounts show that $8,000 of the accounts receivable are uncollectible

Solutions

Expert Solution

a	Bad Debt Expense Dr	300
	Allowance for Doubtful Accounts Cr		300

	260000 * 3% - 7500

b	Bad Debt Expense Dr	7,275
	Allowance for Doubtful Accounts Cr		7,275

	985000*1.5% - 7500

c	Bad Debt Expense Dr	8,000
	Allowance for Doubtful Accounts Cr		8,000

	Total Allowance for Doubt ful debt (7500+8000)

ekkarill92 answered 1 year ago

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