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    Crystal Clear's Avatar
    Crystal Clear Posts: 3, Reputation: 1
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    #1

    Jun 18, 2009, 02:13 PM
    Uncollectible Accounts Recievable?
    Credit sales for the yr. are $400,000, uncollectible accounts expense is estimated @ 1% of credit sales, and the allowance has a $300.00 credit balance before adjustment. What do I journalize and where?
    rehmanvohra's Avatar
    rehmanvohra Posts: 739, Reputation: 27
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    #2

    Jul 1, 2009, 07:19 AM

    Debit Bad Debts expense $4000
    Credit allowance for doubtful debts $4000

    Recording bad debts using credit sales follows income statement approach. The balance in the allowance account will now be $4,300.
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