Answer:
Explanation:
For computing the actual amount of expense, first, we have to compute the expected amount which is shown below:
= Not yet past due × given percentage + past due × given percentage
= $329,000 × 7% + $51,000 × 20%
= $23,030 + $10,200
= $33,230
And, the opening balance of allowance account is $2,600
The amount not yet past due is computed below:
= Accounts receivable - past due
= $380,000 - $51,000
= $329,000
So, the amount of expense
= Estimated amount - opening balance of allowance account
= $33,230 - $2,600
= $30,630
The adjustment entry is shown below:
Bad Debt Expense Dr $30,630
To Allowance for Uncollectible accounts 30,630
(Being the bad debt expense is adjusted)
