Question

Alvin's Transport has total credit sales for the year of $182,000 and estimates that 3% of its credit sales will be uncollectible. Record the end-of-period adjusting entry on December 31, in general journal form, for the estimated bad debt expense. Assume the following independent conditions existed prior to the adjustment:

a. Allowance for Doubtful Accounts has a credit balance of $570.
b. Allowance for Doubtful Accounts has a debit balance of $360

Answer 1

S/n Account Title and Explanation Debit Credit

a. Bad Debt Expense $5,460

($182,000 sales x 3%)

Allowance for Doubtful Accounts $5,460

(To record bad debt expense)

b. Bad Debt Expense $5,460

($182,000 sales x 3%)

Allowance for Doubtful Accounts $5,460

(To record bad debt expense)