Question

At the end of the year, Mercy Cosmetics' balance of Allowance for Uncollectible Accounts is $530 (credit before adjustment. The balance of Accounts Receivable is $21,500. The company estimates that 15% 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.) View transaction list Journal entry worksheet 1 > Record the adjusting entry for Allowance for Uncollectible Accounts Note: Enter debits before credits Transaction General Journal Debit Credit 1

Answer 1

1)
Transaction	Accounts Titles and Explanation	Debit	Credit
1	Bad Debt Expense ( $ 21,500 x 15% ) (-) $ 530	$ 2,695
	Allowance for Uncollectible accounts		$ 2,695
	(To record the adjustment for Allowance for Uncollectible accounts )

2)
Date	Accounts Titles and Explanation	Debit	Credit
September 09	Accounts Receivable	$ 11,800
	Allowance for Uncollectible accounts		$ 11,800
	(To record the re-established portion of account previously written off)
September 09	Cash	$ 11,800
	Accounts Receivable		$ 11,800
	(To record the cash collection on account )