At the end of the period, the manager of Philly Electronics estimated that $40,0

Question

At the end of the period, the manager of Philly Electronics estimated that $40,000 of its accounts receivable were uncollectible. If the Allowance for Doubtful Accounts has a credit balance of $11,200, which of the following sets forth the adjusting entry to record bad debts for the period? Assume the allowance method is used.

A) Debit Bad Debt Expense and credit Allowance for Doubtful Accounts for $28,800

B) Debit Bad Debt Expense and credit Accounts Receivable for $40,000

C) Debit Bad Debt Expense and credit Accounts Receivable for $28,800

D) Debit Bad Debt Expense and credit Allowance for Doubtful Accounts for $40,000

Explanation / Answer

Debit Bad Debt Expense and credit Allowance for Doubtful Accounts for $28,800 (40000-11200) Option A is correct

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