The trial balance before adjustment of Bridgeport Inc. shows the following balan

Question

The trial balance before adjustment of Bridgeport Inc. shows the following balances.

Dr.

Cr.

Give the entry for estimated bad debts assuming that the allowance is to provide for doubtful accounts on the basis of (a) 5% of gross accounts receivable and (b) 6% of gross accounts receivable and Allowance for Doubtful Accounts has a $1,532 credit balance. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.)

No.

Account Titles and Explanation

Debit

Credit

No.

Account Titles and Explanation

Debit

Credit

Dr.

Cr.

Accounts Receivable $95,900 Allowance for Doubtful Accounts 3,260 Sales Revenue (all on credit) $656,600

Explanation / Answer

1.a)

Journal entry

1b.

Journal entry

2.

5% of gross accounts receivable ($95,900*5%) $ 4,795 Add: Debit balance in allowance for doubtful accounts $ 3,260 Baddebt expenses as per % of gross accounts receivable $ 8,055

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