Assume Simple Co. had credit sales of $250,000 and cost of goods sold of $150,00

Question

Assume Simple Co. had credit sales of $250,000 and cost of goods sold of $150,000 for the period. Simple uses the percentage of credit sales method and estimates that ½ percent of credit sales would result in uncollectible accounts. Before the end-of-period adjustment is made, the Allowance for Doubtful Accounts has a credit balance of $250.Simple uses the aging method and estimates that the appropriate ending balance in the Allowance for Doubtful Accounts is $1,600.

Prepare the journal entry to record the end-of-period adjustment for bad debts under the (a) percentage of credit sales method, and (b) aging of accounts receivable method.

a. dr. Bad debt expense
         cr. Allowance for doubtful accounts

b. dr. Bad debt expense
         cr. Allowance for doubtful accounts

I need help figuring out the amounts for the JE above

Explanation / Answer

a. dr. Bad debt expense $1,000 cr. Allowance for doubtful accounts $1,000 b. dr. Bad debt expense $1,350 cr. Allowance for doubtful accounts $1,350

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