Question

Bestway, Inc. had credit sales of $142,000 for the period. The balance in Allowance for Doubtful Accounts is a debit of $643. If Bestway estimates that 2% of credit sales will be uncollectible, what is the required journal entry to record estimated uncollectible accounts?

Answer 1

Answer:

See journal entry below

Explanation:

Uncollectible accounts are portion of the accounts receivable of a business from its various customers which have become uncollectible by the owners of business due to reasons such as inability to pay up debt by the customers, delay in paying up debt etc.

The journal entry to record the estimated uncollected accounts is seen below;

Bad debt expense Dr $2,840

To allowance for uncollectible A/cs Cr.

( 2% × 142,000 ). $2,840