Question

tanning company analyzes its receivables to estimate uncollectible accounts. the accounts receivable balance is $400,000 and credit sales are $1,000,000. an aging of accounts receivable estimates that $12,000 of the outstanding receivables will be uncollectible. what adjusting entry will tanning company make if allowance for doubtful accounts has a credit balance of $2,800 before adjustment?

Answer 1

Dr Bad Debt Expense $9,200.

Cr Allowance for Doubtful Accounts $9,200.

Based on the information given the adjusting journal entry that Tanning Company will make if the Allowance for Doubtful Accounts has a credit balance of the amount of $2,800 before adjustment will be :

Dr Bad Debt Expense $9,200.

Cr Allowance for Doubtful Accounts $9,200.

Amount can be calculated by: Receivables - Credit balance = $12,000-$2,800 = $9,200.

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