Question

At the end of the current year, using the aging of receivable method, management estimated that $15,750 of the accounts receivable balance would be uncollectible. Prior to any year-end adjustments, the Allowance for Doubtful Accounts had a debit balance of $375. What adjusting entry should the company make at the end of the current year to record its estimated bad debts expense?

Answer 1

Answer:

Dr Bad debt expenses $16,125

Cr Allowance for doubtful account $16,125

Explanation:

Adjusting entries

Dr Bad debt expenses $16,125

Cr Allowance for doubtful account $16,125

Uncollectible balance of $15,750 + Allowance for Doubtful Accounts debit balance of $375 =$16,125