The following selected amounts are reported on the year-end unadjusted trial balance report for a company...

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The following selected amounts are reported on the year-end unadjusted trial balance report for a company...

The following selected amounts are reported on the year-end unadjusted trial balance report for a company that uses the percent of sales method to determine its bad debts expense.


Accounts receivable	$	428,000	Debit
Allowance for Doubtful Accounts		1,420	Debit
Net Sales		2,270,000	Credit

All sales are made on credit. Based on past experience, the company estimates 3.0% of credit sales to be uncollectible. What adjusting entry should the company make at the end of the current year to record its estimated bad debts expense?

business accounting

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Answer 1

Answer #1

Answer:

Account Titles and Explanation	Debit ($)	Credit ($)
Bad debts expense	68,100
Allowance for Doubtful Accounts		68,100
Total Balance of Allowance for Doubtful Accounts => 68100- 1420=> $ 66,680 (Credit)

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Answer 2

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