Connect Saved QS 7-6 Percent of accounts receivable method LO P3 Warner Company\

Question

Connect Saved QS 7-6 Percent of accounts receivable method LO P3 Warner Company's year-end unadjusted trial balance shows accounts receivable of S113,000, allowance for doubtful accounts of $740 (creo. and sales of $420,000. Uncollectibles are estimated to be t50% of accounts receivable. 1. Prepare the December 31 year-end adjusting entry for uncollectibles. View transaction list Journal entry worksheet Record the estimate of uncollectibles. Note: Enter debits before credits Dec 31 Record entry Clear entry 2 What amount wouild have been used in the year-end adjusting entry if the alowance account had a year-end unadjusted debit balance of St1000

Explanation / Answer

1.

2. Amount used in the year-end adjusting entry = ($113,000 * 1.50%) + $1,000 = $2,695

Date General Journal Debit Credit Dec. 31 Bad debts expense[($113,000 * 1.50%) - $740] $955 Allowance for doubtful accounts $955

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