Write-Off of Uncollectible Accounts The Rock has credit sales of $540,000 during

Question

Write-Off of Uncollectible Accounts

The Rock has credit sales of $540,000 during 2019 and estimates at the end of 2019 that 2% of these credit sales will eventually default. Also, during 2019 a customer defaults on a $1,700 balance related to goods purchased in 2019.

Required:

1.  Prepare the journal entry to record the defaulted balance.

Accounts Receivable ?

prepare the adjusting entry to record the bad debt expense for 2019.

Accounts Receivable ?

prepare the adjusting entry to record the bad debt expense for 2019.

Explanation / Answer

1 Allowance for Doubtful Accounts 1700            Accounts Receivable 1700 2 Bad Debt Expense 10800 =540000*2%           Allowance for Doubtful Accounts 10800

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