Brief Exercise 5-6 Record the adjusting for uncollectible accounts (L05-5)
At the end of the year, Mercy Cosmetics balance of Allowance for Uncollectible Accounts is $490 (credid before adjustment. The balance of Accounts Receivable is $19,500. The company estimates that 10% of accounts will not be collected over the next year.
What adjustment would Mercy Cosmetics record for Allowance for Uncollectible Accounts? (if no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.)
| 1 | |||
| General Journal | Debit | Credit | |
| Bad Debts expense | 1460 | =(19500*10%)-490 | |
| Allowance for Uncollectible accounts | 1460 | ||
| 2 | |||
| General Journal | Debit | Credit | |
| Bad Debts expense | 3154 | =(26600*9%)+760 | |
| Allowance for Uncollectible accounts | 3154 |
| 3 | ||
| Year | Interest revenue | |
| 2021 | 500 | =25000*8%*3/12 |
| 2022 | 1500 | =25000*8%*9/12 |
At the end of the year, Mercy Cosmetics balance of Allowance for Uncollectible Accounts is $490