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16 September, 08:23

Warner Company's year-end unadjusted trial balance shows accounts receivable of $99,000, allowance for doubtful accounts of $600 (credit), and sales of $280,000. Uncollectibles are estimated to be 0.5% of sales.

Prepare the December 31 year-end adjusting entry for uncollectibles.

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  1. 16 September, 10:06
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    The journal entry to record the uncollectible is shown below:

    On December 31

    Bad debt expense $800

    To Allowance for doubtful debts $800

    (Being the bad debt expense is recorded)

    The computation is shown below:

    = Sales * estimated percentage - credit balance of doubtful accounts

    = $280,000 * 0.5% - $600

    = $1,400 - $600

    = $800
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