Question

An aging of a company's accounts receivable indicates that $4,000 are estimated to be uncollectible. If Allowance for Doubtful Accounts has a $1,200 credit balance, the adjustment to record bad debts for the period will require a

Answer 1

Answer:the adjustment to record bad debts for the period will require a debit of $3,800 on  Bad Debts Expense account and  a credit of $3,800  on Accounts Receivable account.

Explanation:

Account receivables = $4,000 uncollectible

Allowance for Doubtful Accounts =$1,200 credit balance

Adjustment to record bad debts =Account receivables-$1,200 credit balance

= $4,000 - $1,200

=$3,800

The  adjustment journal entry to record the bad debts for the period will require

Accounts                               Debit                 Credit

Bad debt expense              $3,800

Accounts receivables                                       $3,800