Question 14 Splish Brothers Inc. uses the percentage of receivables method for r

Question

Question 14 Splish Brothers Inc. uses the percentage of receivables method for recording balance of $3200 before adjustment? bad debts expense. The accounts receivable balance is $320000 and credit sales are $3210000. 4% of accounts e will be uncollectible. What adjusting entry will Splish Brothers Inc. make if the Allowance for Doubtful Accounts has a credit 0 Bad Debt Expense 32100 Accounts Receivable 32100 O Bad Debt Expense Allowance for Doubtful Accounts 32100 9600 O Bad Debt Expense 9600 Allowance for Doubtful Accounts 9600 O Bad Debt Expense 9600 Accounts Receivable Click if you would like to Show Work for this question: Open Show Work

Explanation / Answer

CALCULATION OF THE BAD Debt Expenses Balance in Account Receivable = $                 3,20,000 Uncollectable Amount = 4% of Account Receivable = 4% of $ 320,000 = $                    12,800 Bad Debts Exepenses provission = $                    12,800 Less: Opening Balance in Allowance for Doubtful Debts = $                       3,200 Credit   Bad Debts Expenses of the year $                       9,600 Date Particulars Debit Credit Bad Debts Expenses $                       9,600        To Allowance for Doubtful Accounts $                        9,600 As per above, Answer = Option 3

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