Question

A company has $ 235 comma 000 in credit sales. The company uses the allowance method to account for uncollectible accounts. The Allowance for Doubtful Accounts now has a $ 7 comma 570 credit balance. If the company estimates 6​% of credit sales will be​ uncollectible, what will be the amount of the journal entry to record estimated uncollectible​ accounts?

Answer 1

Answer:

$14,100

Explanation:

The computation of the amount record estimated uncollectible​ accounts are shown below:

= Credit sales × estimated percentage

= $235,000 × 6%

= $14,100

We simply multiply the credit sales with the estimated percentage so that the accurate amount can come

The journal entry is shown below:

Bad debt expense A/c Dr  $14,100

  To Allowance for doubtful debts  $14,100

(Being the adjusting entry is recorded)