Nash's Trading Post, LLC uses the percentage of receivables basis to record bad debt expense and concludes that 3% of accounts receivable will become uncollectible. Accounts receivable are $439,700 at the end of the year, and the allowance for doubtful accounts has a credit balance of $ 3,041 (a) Prepare the adjusting journal entry to record bad debt expense for the year tb) If the allowance for doubtful accounts had a debit balance of $ 918 instead of a credit balance of $ 3041, prepare the adjusting journal entry for bad debt expense. (Credit account titles are outomatically indented when amount is entered. Do not indent manually) No. Account Titles and Explanation (a) Bad Debt Expense Debit Credit Allowance for Doubtful Accounts b) Bad Debt Expense Allowance for Doubtful Accounts

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Business

Pickle

24 August, 20:02

Nash's Trading Post, LLC uses the percentage of receivables basis to record bad debt expense and concludes that 3% of accounts receivable will become uncollectible. Accounts receivable are $439,700 at the end of the year, and the allowance for doubtful accounts has a credit balance of $ 3,041 (a) Prepare the adjusting journal entry to record bad debt expense for the year tb) If the allowance for doubtful accounts had a debit balance of $ 918 instead of a credit balance of $ 3041, prepare the adjusting journal entry for bad debt expense. (Credit account titles are outomatically indented when amount is entered. Do not indent manually) No. Account Titles and Explanation (a) Bad Debt Expense Debit Credit Allowance for Doubtful Accounts b) Bad Debt Expense Allowance for Doubtful Accounts

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Rashad Howe · Answer 1

(a) Prepare the adjusting journal entry to record bad debt expense for the year with Allowance for Doubtful Account of $ 3,041

Dr Bad Debt Expenses $10,150

Cr Allowance for doubtful debt $10,150

(b) Prepare the adjusting journal entry to record bad debt expense for the year with Allowance for Doubtful Account of $ 918

Dr Bad Debt Expenses $14,109

Cr Allowance for doubtful debt $14,109

Explanation:

The Allowance for Doubtful Account will have the Balance of : 439,700 x 3% = $13,191

(a) : Bad Debt Expenses needs to be recorded: 13,191 - 3,041 = $10,150

(b) : Bad Debt Expenses needs to be recorded: 13,191 + 918 = $14,109