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8 October, 15:58

Warner Company's year-end unadjusted trial balance shows accounts receivable of $117,000, allowance for doubtful accounts of $780 (credit), and sales of $460,000. Uncollectibles are estimated to be 1.50% of accounts receivable. 1. Prepare the December 31 year-end adjusting entry for uncollectibles.

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  1. 8 October, 17:59
    0
    Debit Bad debt expenses with $1,755; and credit Allowance for doubtful accounts also with $1,755.

    Explanation:

    Bad debt expenses = Receivables * Uncollectable percentage = $117,000 * 1.5% = $1,755

    The adjusting entries will be as follows:

    Details Dr ($) Cr ($)

    Bad debt expenses 1,755

    aAllowance for doubtful accounts 1,755

    To record the estimated uncollectable amount.
  2. 8 October, 18:56
    0
    Dr Bad debts expense $975

    Cr Allowance for Doubtful Accounts $975

    Explanation:

    Warner Company's December 31 year-end adjusting entry for uncollectibles

    Dr Bad debts expense $975

    Cr Allowance for Doubtful Accounts $975

    (117,000*1.50%) - 780

    =$1,755-$780

    =$975
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