Question

Multiple Choice Question 84 Vaughn Company uses the percentage ot receivables method for recording bad debt expense. The accounts receivable balance is 5599000 and credit sales are $2640000. Management estimates that 3% of accounts receivable will be uncollectible. What adjusting entry will Vaughn Company make to record bad debt expense if the Allowance for Doubtful Accounts has a $5200 credit balance before adjustment? 0 Bad Debt Expense 17970 Accounts Receivable 17970 Bad Debt Expense 12770 Allowance for Doubtful Accounts 12770 O Bad Debt Expense 17970 Allowance for Doubtful Accounts 17970 0 Bad Debt Expense 12770 Accounts Receivable 12770 Click if you would like to Show Work for this question:

Answer 1

Beginning balance in Allowance for doubtful accounts	$5,200
Add : Allowance for uncollectible (plug)	$12,770
Ending balance in allowance for doubtful accounts ($599,000*3%)	$17,970

The answer is -

Bad debt expense	$12,770
Allowance for doubtful accounts		$12,770