Borke Company has a credit balance of $3,000 in Allowance for Doubtful Accounts.

Question

Borke Company has a credit balance of $3,000 in Allowance for Doubtful Accounts. The estimated bad debt expense under the percentage-of-sales basis is $4,100. The total estimated uncollectibles under the percentage-of-receivables basis is $5,800.

Prepare the adjusting entry under each basis. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.)

(Under the percentage-of-sales basis)

(Under the percentage-of-receivables basis)

Explanation / Answer

Date Account title debit credit 1 Bad debt expense 4100 Alloeance for bad debt 4100 [under % of sales method ] 2 Bad debt expense 2800 Allowance for bad debt    (5800-3000) 2800 [under % of receivable basis ]

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