3. Billings Corporation had total sales in the current year of $600,000 and cred

Q: 3. Billings Corporation had total sales in the current year of $600,000 and cred

The answer is " c. $600 debit to Bad Debt Expense " Adjusting entry will include a debit to Bad Debt Expense and the amount = (530,000 x 2%) - 10,000 = $600

ID: 2332721 • Letter: 3

Question

3. Billings Corporation had total sales in the current year of $600,000 and credit sales of $530,000. The Accounts Receivable balance was $350,000 on the balance sheet date and the Allowance for Doubtful Accounts had a credit balance of $10,000 before adjusting entries. Bad debt expense is estimated as 2% of credit sales. The adjusting entry to record estimated bad debt expense would include a

a. $10,600 debit to Bad Debt Expense

b. $10,600 credit to Bad Debt Expense

c. $600 debit to Bad Debt Expense

d. $600 credit to Bad Debt Expense

Explanation / Answer

The answer is " c. $600 debit to Bad Debt Expense "

Adjusting entry will include a debit to Bad Debt Expense and the amount = (530,000 x 2%) - 10,000 = $600

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3. Billings Corporation had total sales in the current year of $600,000 and cred

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