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    AMT's Avatar
    AMT Posts: 2, Reputation: 1
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    #1

    Nov 9, 2006, 12:46 PM
    Bad debts expense accounts
    If allowance for doubtful accounts has a credit balance of $2100 in the trial balance, how do I journalize the adjusting entry at December 31, assuming bad debts are expected to be 1% of net sales. Sales are $840,000.
    And 10% of accounts receivables? A/R is $110,000.
    Thanks
    kloklo's Avatar
    kloklo Posts: 2, Reputation: 1
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    #2

    Nov 10, 2006, 07:30 PM
    Quote Originally Posted by AMT
    If allowance for doubtful accounts has a credit balance of $2100 in the trial balance, how do I journalize the adjusting entry at December 31, assuming bad debts are expected to be 1% of net sales. Sales are $840,000.
    and 10% of accounts receivables? A/R is $110,000.
    thanks
    bad debt expense (debit)
    allowance for uncollectibles (credit)
    I would use net sales method to calculate the amount. 8400+11000=19400 19400+2100=21500 and that would be the # , but You should double check because I don't have my book with me:)
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