Question

At the end of the current year, using the aging of receivable method, management estimated that $24,750 of the accounts receivable balance would be uncollectible. Prior to any year-end adjustments, the Allowance for Doubtful Accounts had a debit balance of $675. 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 Expense $25,425

Cr Allowance for Doubtful Accounts $25,425

Explanation:

Based on the information given the appropriate adjusting entry should the company make at the end of the current year to record its estimated bad debts expense will be

Dr Bad Debt Expense $25,425

Cr Allowance for Doubtful Accounts $25,425

($24,750+$675)

(To record estimated bad debts expense )