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 3 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.
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