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Warner Company’s year-end unadjusted trial balance shows accounts receivable of $112,000, allowance for doubtful accounts of...

Warner Company’s year-end unadjusted trial balance shows accounts receivable of $112,000, allowance for doubtful accounts of $730 (credit), and sales of $410,000. Uncollectibles are estimated to be 1% of sales. Prepare the December 31 year-end adjusting entry for uncollectibles.

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Answer #1

Bad debt expenses = Sales * 1%

= $410,000 * 1%

= $4,100

JOURNAL ENTRY

December 31 Bad debt expense $4,100
Allowance for doubtful accounts $4,100
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