[misha2006]

How to prepare a partial balance sheet for a company from the following information:

Cash-$10,000

Account Receivable-$6000

Bad Debts Expense-$1,400

Merchandise Inventory-$1,800

Allowance for Doubtful Accounts-$200

[rehmanvohra]

Ignore bad debts expense as it is an item for Income statement. For a partial balance sheet, you need to project the available information. In this case it is current assets.

[misha2006]

[QUOTE=rehmanvohra;3580072]Ignore bad debts expense as it is an item for Income statement. For a partial balance sheet, you need to project the available information. In this case it is current assets.

Thank you

[misha2006]

Company had a balance in Accounts Receivable of $22,300. Net credit sales for the year were $515,000. The Allowance for Doubtful Accounts has a debit balance of $615. How do you journalize the recording of the bad debt expense under the balance sheet approach if $1,510 is the estimated amount of uncollectible accounts?

[rehmanvohra]

The formula is:
Required balance 1510
+ Opening debit balance 615
Total expense 2125

Note:
(a) If opening balance is credit then you deduct from required balance.
(b) If there is any write offs, you must add to required balance