Journal entry – using percentage of receivables method. Taiga-Barrett Company us

Question

Journal entry – using percentage of receivables method. Taiga-Barrett Company uses the percentage of receivable method for records it’s Bad Debt Expense. Total credit sales were $3,000,000, of which $400,000 remains uncollected at the end of the year (A/R balance). Taiga estimates that 4.5% will be uncollectible. If the Allowance for Doubtful Accounts had a credit balance of $16,000 before this adjustment, what is the journal entry Taiga should make to bring the balance in the Allowance account up to date?

Explanation / Answer

Journal entry

Date accounts & explanation debit credit Bad debt expense (400000*4.5%-16000) 2000 Allowance for doubtful accounts 2000 (To record adjusting entry)

Related Questions

Navigate

• Browse (All)
• Browse J
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.