Question
In: Accounting
Mazie Supply Co. uses the percent of accounts receivable method.
Exercise 7-7 Percent of accounts receivable method LO P3
Mazie Supply Co. uses the percent of accounts receivable method. On December 31, it has outstanding accounts receivable of $114,500, and it estimates that 4% 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 $1,947 credit balance before the adjustment.
(b) a $573 debit balance before the adjustment.
Solutions
Expert Solution
| Transaction | General Journal | Debit | Credit |
| (a) | Bad Debt Expense [($114,500 x 4%) - $1,947] | $2,633 | |
| Allowance for Doubtful Accounts | $2,633 | ||
| (To record bad debt expense) | |||
| Transaction | General Journal | Debit | Credit |
| (b) | Bad Debt Expense [($114,500 x 4%) + $573] | $5,153 | |
| Allowance for Doubtful Accounts | $5,153 | ||
| (To record bad debt expense) |
ekkarill92 answered 2 years agoRelated Solutions
Mazie Supply Co. uses the percent of accounts receivable method. On December 31, it has outstanding...
Mazie Supply Co. uses the percent of accounts receivable method.
On December 31, it has outstanding accounts receivable of $124,500,
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