No. | Date | Account Titles and Explanation | Debit | Credit |
(a) | Dec. 31 | Bad debt expense | 700 | |
Allowance for doubtful accounts | 700 | |||
(b) | Dec. 31 | Bad debt expense | 5,280 | |
Allowance for doubtful accounts | 5,280 | |||
(c) | Dec. 31 | Bad debt expense | 5,440 | |
Allowance for doubtful accounts | 5,440 |
b) Bad debt expense = accounts receivable x % of expected as doubtful - Existing credit balance in allowance for doubtful accounts
= 72,000 x 9% - 1,200
= $5,280
c) Bad debt expense = accounts receivable x % of expected as doubtful + Existing debit balance in allowance for doubtful accounts
= 72,000 x 7% + 400
= $5,440
Kindly comment if you need further assistance. Thanks‼!
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