Question

Craigmont uses the allowance method to account for uncollectible accounts. its year-end unadjusted trial balance shows accounts receivable of $104,500, allowance for doubtful accounts of $665 (credit) and sales of $925,000. if uncollectible accounts are estimated to be 4% of accounts receivable, what is the amount of the bad debts expense adjusting entry?

Answer 1

$104,500 * 0.04 = $4,180 - $665 = $3,515