Brief Exercise 7-6 (Part Level Submission) Answer the following independent ques

Question

Brief Exercise 7-6 (Part Level Submission) Answer the following independent questions. (a) Pharoah, Inc. had net sales in 2017 of $1,459,000. At December 31, 2017, before adjusting entries, the balances in selected accounts were Accounts Recelvable $223,200 debit, and illo ance for Doubtful Accounts $1,891 debit Assume that 11% of accounts receivable will prove to be uncollectible, prepare the entry to record bad debt expense ("no entry is required, select "No Entry" for the account titles and enter o for the amounts. Credit acount titles are automatically indented when the amount is entered. Do not indent manually.) Credit Dec. 31, 2017 OUNTS NK TO TEXT Attempts: 0 of 3 used SAVE FOR LATER

Explanation / Answer

Workings:

As per the estimate 11% of the accounts receivable balance should be the balance of the allowance for doubtful accouts balance.

The amount of balance in allowance for doubtful accounts should be:

Since the balance in books for allowance account is a debit balance, to true it to arrive at 24,552 credit balance below amount of adjustment is required:

Please comment, if further explanation is required. Your rating is appreciated

Date Accout titles and explanation Debit Credit Dec. 31 Bad debt expense 26443 Allowance for doubtful accounts 26443 [Entry to record bad debt expense]

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