1. Riverbed Company’s unadjusted trial balance at December 31, 2017, included th

Question

1. Riverbed Company’s unadjusted trial balance at December 31, 2017, included the following accounts.

Debit

Credit

Riverbed Company estimates uncollectible accounts to be 5% of gross accounts receivable. Determine its bad debt expense for 2017.

2. Headland Co. provides for doubtful accounts based on 3% of gross accounts receivable, The following data are available for 2017.

What is the balance in Allowance for Doubtful Accounts at December 31, 2017?

Debit

Credit

Accounts receivable $51,200 Allowance for doubtful accounts $7,880 Net sales $1,262,100

Explanation / Answer

SOLUTION

1.

Particulars Amount Accounts Receivable 51,200 Percentage 5% Bad debt expense, before adjustment 2,560 Allowance for doubtful accounts (debit balance) 7,880 Bad debt expense, as adjusted 10,440

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