Hirdt Co. uses the percentage-of-receivables basis to record bad debt expense and concludes that 3% of accounts receivable will become uncollectible. Accounts receivable are $401,100 at the end of the year, and the allowance for doubtful accounts has a credit balance of $3,110. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) (a) Prepare the adjusting journal entry to record bad debt expense for the year. (b) If the allowance for doubtful accounts had a debit balance of $890 instead of a credit balance of $3,110, prepare the adjusting journal entry for bad debt expense

Question

Business

Maggie Barnes

1 May, 03:03

Hirdt Co. uses the percentage-of-receivables basis to record bad debt expense and concludes that 3% of accounts receivable will become uncollectible. Accounts receivable are $401,100 at the end of the year, and the allowance for doubtful accounts has a credit balance of $3,110. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) (a) Prepare the adjusting journal entry to record bad debt expense for the year. (b) If the allowance for doubtful accounts had a debit balance of $890 instead of a credit balance of $3,110, prepare the adjusting journal entry for bad debt expense

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Answers (1)

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Julianne Hansen · Answer 1

the answer is given below;

Explanation:

a. Allowance for doubtful accounts $401,100*3%=$12,033

Allowance for doubtful accounts-opening ($3,110)

Bad Debt Expense $8,923

Bad Debt Expense Dr.$8,923

Allowance for doubtful accounts Cr.$8,923

b. Allowance for doubtful Accounts $401,100*3%=$12,033

Allowance for doubtful accounts-opening $890

Bad Debt Expense $12,923

Bad Debt Expense Dr.$12,923

Allowance for doubtful accounts Cr.$12,923