Question

Using the aging method of accounts receivable method, $5,300 of the company's Accounts Receivable are estimated to be uncollectible. At the end of the year, the balance of Accounts Receivable is $103,000 and the unadjusted credit balance of the Allowance for Doubtful Accounts is $560. Credit sales during the year totaled $156,000. What is the current year's Bad Debt Expense? Multiple Choice $4,740. S7300 | o ooo $5,300.

Answer 1

1) Bad debt expense = Ending balance should be-Beginning balance = 5300-560 = 4740

So answer is a) $4740

2) Journal entry

Date	account and explanation	Debit	Credit
	Account receivable	XXX
	Allowance for doubtful accounts		XXX
	Cash	XXX
	Account receivable		XXX

So answer is d) Account receivable and credit allowance for doubtful accounts then debit cash and credit account receivable