Bad debts expense accounts

AMT · #1 Nov 9, 2006, 10:46 AM

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 · Nov 10, 2006, 05:30 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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