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​At the end of the year, Breyer Associates had a credit balance in its allowance for uncollectible accounts of $9,000 before adjustment


At the end of the year, Breyer Associates had a credit balance in its allowance for uncollectible accounts of $9,000 before adjustment. The balance in Breyer's gross accounts receivable is $660,000. Breyer's management estimates that 6% of its accounts receivable balance will not be collected. 


What journal entry should Breyer record to adjust its allowance for uncollectible accounts? (if no entry is required for a transaction/event, select "No journal entry required" in the first account field.) 

Solutions

Expert Solution

Bad debts expense = ( Gross accounts receivable * Uncollectible % ) - Credit balance of allowance for uncollectible accounts = ( 660000 * 6% ) - 9000 = 30600
Journal entry :
Debit Credit
Bad debts expense 30600
   Allowance for uncollectible accounts 30600

ekkarill92 answered 2 years ago
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