[Just Looking]

It is simple math. Let me give you an example.

If you have a balance of negative 100 and you need a balance of 1000 you add 1100.

(100) + 1100 = 1000

Or even simpler, you have -1 and you want 5, you add 6.

-1 + 6 = 5

The only difference here is you are dealing with debits and credits. The math is the same.

[snowmist69]

Let me see if I understand,I know that with the simple math
-600+72,714=72,114

Now how would this be form for accounting or is it just this simple or do I have to have the 72,714 be listed as an adjustment. I'll let you explain or I'll confuse both of us.

[Just Looking]

Haha, that last line made me laugh. It is just that simple.

$43,700... Beginning Allowance balance
-44,300... A/R written off
=($600)... Ending Allowance balance, prior to adjustment.
+ 72,714... Credit to Allowance account
= $72,114... Ending Allowance balance, after adjustment


You need to make an entry to the Allowance of $72,714 with the debit being Bad Debt Expense. I'm not sure how much you are working with debits and credits yet. I could explain using those terms but I don't want to confuse you if you aren't comfortable with debits and credits yet.

[snowmist69]

Debits and credits are still very new to me.
Thank you so much and I'm sure you will see me a lot until I understand this. Now can you walk me through the uncollectible accounts expense. Would that be the total from the beginning 43,700 then take that away from 72,114 or have I lost site again.

[Just Looking]

That is the $72,714, There are two sides to the entry - $72,714 dr to the expense and $72,714 credit to the allowance.

[snowmist69]

Thank you, I have completed this assignment with you help and you made me work and thanks for that or else I will never get this. You are a very patient person.

[Just Looking]

You're welcome. I hope you will read the whole thread over again and make sure you understand it. I can guarantee it will come in useful in the future. Good luck.