At December 31, 2011, a company\'s records include the following: Net Sales (all
ID: 2416526 • Letter: A
Question
At December 31, 2011, a company's records include the following:
Net Sales (all on credit) $750,000
Accounts Receivable at December 31 $225,000
Write-offs of accounts receivable during the year $7,100
Allowance for doubtful accounts at January 1, 2011 $8,500
23) Assuming the company uses the aging of receivables method and estimates the uncollectible amount at 5% of accounts receivable, what is the required adjusting entry to record bad debt expense for the year?
Bad Debt Expense $9.850
Allowance for Doubtful Accounts $9,850
Bad Debt Expense $2,750
Accounts Receivable $2,750
Bad Debt Expense $11,250
Allowance for Doubtful Accounts $11,250
Bad Debt Expense $10,895
Accounts Receivable $10,895
a.Bad Debt Expense $9.850
Allowance for Doubtful Accounts $9,850
b.Bad Debt Expense $2,750
Accounts Receivable $2,750
c.Bad Debt Expense $11,250
Allowance for Doubtful Accounts $11,250
d.Bad Debt Expense $10,895
Accounts Receivable $10,895
Explanation / Answer
C) Bad Debts Expense A/c 11250
To Allowance for Doubtful debts 11250
Though the corect option would have been
Bad Debts Expense A/c 2750
To Allowance for Doubtful debts 2750
after adjustment of credit balance of Allowance for doubtful debts.
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