1) At the end of the year, a company reports a balance in its Allowance for Unco

Q: 1) At the end of the year, a company reports a balance in its Allowance for Unco

Bad debt Expense = $288,000 * 3% = $8,640 Note : Allowance for Doubtful Debts Account - New balance = $2,000 (credit) + $8,640 = $10,640 Accounts titles & explanation Debit ($) Credit ($) Bad debt Expense 8,640 Allowance for Doubtful Debts 8,640 (To record Bad debt expense for the year)

ID: 2598090 • Letter: 1

Question

1) At the end of the year, a company reports a balance in its Allowance for Uncollectible Accounts of $2,000 (credit) before any year-end adjustment. The company estimates future uncollectible accounts to be 3% of credit sales for the year. Credit sales for the year total $288,000. Record the adjustment for the allowance for uncollectible accounts using the percentage-of-credit-sales method. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Explanation / Answer

Bad debt Expense = $288,000 * 3% = $8,640

Note : Allowance for Doubtful Debts Account - New balance = $2,000 (credit) + $8,640 = $10,640

Accounts titles & explanation Debit ($) Credit ($) Bad debt Expense 8,640 Allowance for Doubtful Debts 8,640 (To record Bad debt expense for the year)

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1) At the end of the year, a company reports a balance in its Allowance for Unco

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