At each calendar year-end, Mazie Supply Co. uses the percent of accounts receiva

Question

At each calendar year-end, Mazie Supply Co. uses the percent of accounts receivable method to estimate bad debts. On December 31, 2013, it has outstanding accounts receivable of $134,000, and it estimates that 4% will be uncollectible.

  

Prepare the adjusting entry to record bad debts expense for year 2013 under the assumption that the Allowance for Doubtful Accounts has

Adjusting entries (all dated December 31, 2013).

At each calendar year-end, Mazie Supply Co. uses the percent of accounts receivable method to estimate bad debts. On December 31, 2013, it has outstanding accounts receivable of $134,000, and it estimates that 4% will be uncollectible.

Explanation / Answer

,

Date Account Titles and Explanation Debit Credit (a)December 31,2013 Bad Debt Expense (134,000 *4%) - $ 2,278 3,082 Allowance for Doubtful Accounts 3,082 (b) December 31,2013 Bad Debt Expense ( $ 134,000 *4% ) + $ 670 6,030 Allowance for Doubtful Accounts 6,030

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