Check out some similar questions!

kimie2008 · Nov 21, 2009, 10:36 AM

The adjustments says The allowance for doubtful account should have a balance of $973 after your adjustment. This will bring the balance to approximately 2.5% of the accounts receivable account balance and is based on the balance seet approach.

The part I'm having trouble is what do I do to the accounts receivable?

monkey72501 · Nov 21, 2009, 04:02 PM

Susquehanna Rental Comprehensive problem - ANSWER KEY

morgaine300 · Nov 22, 2009, 04:23 PM

monkey72501, first, start your own thread for your own questions instead of tagging onto someone else's (which isn't even related).

Second, we don't provide answer keys. The problem is yours to work out. We we help with things you do not understand, but we do not just supply answers. If you're allowed access to an answer key, then you would have been informed of how to access it. If you are not allowed access to it, then it is not right for you to be asking for one.

morgaine300 · Nov 22, 2009, 04:27 PM

Kimie, you don't do anything to the receivables. The entry for the allowance method of accounting for bad debt is always:

Dr. Bad Debt Expense
Cr. Allowance for Bad Debt

But there are two methods to use to estimate the dollar amount that goes into that entry. Notice receivables isn't in that entry.

The receivables method (which uses receivables but doesn't do anything to it) is a method by which they decide how much should be in the allowance account. Not how much is added to it, but how much should be there. Meaning the amount you put into it has to be the amount to would make it come out to that balance. i.e. if there's 2 in there and you want it to be 7, then you have to put 5 into it to get to 7.

The problem is giving you the 7, the amount they want in that account. So you have to figure out how goes into it in order to get there. And that's the number that goes into your entry.

patchesw · Nov 23, 2009, 03:00 PM

How do I do an adjustment entry?

morgaine300 · Nov 26, 2009, 10:45 PM

patchesw, first, please start you own thread.

Second, your question is extremely ambiguous. There are a lot of different adjusting entries. No one can give you some simple answer to that.