Question

Multiple Choice Question 113 Blue Spruce Corp. uses the percentage-of-receivables method for recording bad debt expense. The Accounts Receivable balance is $400000 and credit sales are $1600000. Management estimates that 6 % of accounts receivable will be uncollectible. What adjusting entry will Blue Spruce Corp. make if the Allowance for Doubtful Accounts has a credit balance of $4000 before adjustment? Bad Debt Expense 16000 Accounts Receivable 16000 Bad Debt Expense 20000 Allowance for Doubtful Accounts 20000 Bad Debt Expense 8000 Allowance for Doubtful Accounts 8000 Bad Debt Expense 28000 Allowance for Doubtful Accounts 28000

Answer 1

closing balane ot Acreunil Reavables $५०००0० 61.0f Account eaivebles ar doubiful -7 (400000) $240000 a prouisiun fir doubihul aconh $u000. v's niad to create a prouision fuy $20000 There is stll we झ्पनी Bad debt ezpenses 0000 Allowans doubtfil Accounts $20000 Direrl uirle-oH mehod allowanle Acrount Under thure will An Account orecoivable is waiten off to Conpense only 4fter t ts dtormined to be Anwer be mo uncollectibla Cast ophan is coaved optim A 3 method of indicales belane allowane Debit allowanie for doubt ful thoit tue ezuss of prouisi im reated atcounts uitten off en for them re loivables are Generally altmuanes for doublhu aount Rhould howe Creol balan te * Conrect ophom