Ask Question
21 August, 03:16

QS 9-8 Percent of sales method LO P3 Warner Company's year-end unadjusted trial balance shows accounts receivable of $105,000, allowance for doubtful accounts of $660 (credit), and sales of $340,000. Uncollectibles are estimated to be 1% of sales. Prepare the December 31 year-end adjusting entry for uncollectibles.

+1
Answers (1)
  1. 21 August, 06:21
    0
    Bad Debts Expense $ 2740 Debit

    Allowance for doubtful accounts $ 2740 Credit

    Explanation:

    Warner Company

    Accounts receivable $105,000,

    Allowance for doubtful accounts $660 (credit),

    Sales $340,000

    Uncollectibles are estimated to be 1% of sales.

    Uncollectibles of 1% of sales means that after adjusting entry is passed the uncollectible amount must be $3400 (1% of $340,000).

    We have a credit balance of $ 660

    The debit balance in the Allowance for doubtful accounts must be $ 3400.

    The adjustment will be = $3400 - $660 = $ 2740

    The Adjusting Entry will be

    Bad Debts Expense $ 2740 Debit

    Allowance for doubtful accounts $ 2740 Credit
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “QS 9-8 Percent of sales method LO P3 Warner Company's year-end unadjusted trial balance shows accounts receivable of $105,000, allowance ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers