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