[rosebud059]

Your examination of accounts receivable (balance in ledger $16,490) reveals that Sammy had written-off a customer accountant after notification that the customer had declared bankruptcy. Sammy's journal entry was:

10/5/2011
Bad debt expense 650
Allowance for uncollectible accounts 650
To write-off customer

The 12/31/2011 balance in the allowance account is a credit balance of $1,375. Bridger uses the % of accounts receivable method for estimating bad debt expense and uses 3%.