Question

3 percent of outstanding accounts receivable are uncollectible.

Accounts Receivable, December 31, 2011 ............ $ 590,000
Allowance for Doubtful Accounts before adjustment,
December 31, 2011 ............................... 18,000 (dr)
Sales--2011........................................ 2,180,000
Sales Discounts--2011 ............................. 18,000
Sales Returns--2011 ............................... 27,000

Prepare the adjusting entry for doubtful accounts expense under each of the following assumptions:
(1) 3 percent of outstanding accounts receivable are uncollectible.
(2) 1.5 percent of 2011 net sales are uncollectible.
(3) An aging schedule of the accounts shows that $21,400 of the accounts are uncollectible.

Answer 1

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The journal entries have been provided based on different assumptions asked in the question.

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