Warner Company's year-end unadjusted trial balance shows accounts receivable of $112,000, allowance for doubtful accounts of $730 (credit), and sales of $410,000. Uncollectibles are estimated to be 1.50% of accounts receivable. 1. Prepare the December 31 year-end adjusting entry for uncollectibles.

Debit bad debt expenses with $1,680, and credit Accounts receivable also with $1,680.

Explanation:

Uncollectibles = Accounts receivable * 1.50% = $112,000 * 1.50% = $1,680

The December 31 year-end adjusting entry for uncollectibles will be as follows:

Details Dr ($) Cr ($)

Bad debt expenses 1,680

Accounts receivable 1,680

Being the amount Accounts receivable estimated to be uncollectible