osie Dry Cleaning was started on January 1, Year 1. It experienced the following events during its first two years of operation: Events Affecting Year 1 Provided $45,000 of cleaning services on account. Collected $39,000 cash from accounts receivable. Adjusted the accounting records to reflect the estimate that uncollectible accounts expense would be 1 percent of the cleaning revenue on account.

Question

Business

Margaret Faulkner

6 November, 10:55

osie Dry Cleaning was started on January 1, Year 1. It experienced the following events during its first two years of operation: Events Affecting Year 1 Provided $45,000 of cleaning services on account. Collected $39,000 cash from accounts receivable. Adjusted the accounting records to reflect the estimate that uncollectible accounts expense would be 1 percent of the cleaning revenue on account.

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Matthew · Answer 1

The Bad Debt expense will be in year 1;

Explanation:

The Bad Debt Expense $45,000*1%=$450

The journal entry will be

Bad Debt Expense Dr.$450

Account Receivable Cr.$450