Print View 6. The following selected amounts are reported on the year-end unadju

Question

Print View 6. The following selected amounts are reported on the year-end unadjusted trial balance report for a company that uses the percent of sales method to determine its bad debts expense Accounts receivable Allowance for Doubtful Accounts Net Sales s 432,000 Debit 1,380 Debit 2,230,000 Credit All sales are made on credit. Based on past experience, the company estimates 2.0% of credit sales to be uncollectible. What adjusting entry should the company make at the end of the current year to record its estimated bad debts expense? O Debit Bad Debts Expense $10,020; credit Allowance for Doubtful Accounts $10,020. O Debit Bad Debts Expense $43,220; credit Allowance for Doubtful Accounts $43,220. O Debit Bad Debts Expense $45,980; credit Allowance for Doubtful Accounts $45,980. O Debit Bad Debts Expense $8,640, credit Allowance for Doubtful Accounts $8.640. O Debit Bad Debts Expense $44,600: credit Allowance for Doubtful Accounts $44,600.

Explanation / Answer

Adjusting entry :

So answer is e) Debit Bad debt expense $44600; Credit Allowance for doubtful accounts $44600

Date accounts & explanation debit credit Bad debt expense (2230000*2%) 44600 Allowance for doubtful accounts 44600 (To record adjusting entry)

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