At December 31, 2015, Ethan Company reports the following results for its calend

Question

At December 31, 2015, Ethan Company reports the following results for its calendar-year. Cash sales $ 2,103,140 Credit sales 3,316,000 In addition, its unadjusted trial balance includes the following items. Accounts receivable $ 1,004,748 debit Allowance for doubtful accounts 16,510 debit There was objective evidence that 11% of a $142,000 debt owed by a debtor, Nathan Company, would most probably be uncollectible. An aging analysis of the rest of the accounts receivables indicated that an estimated 7% of these accounts would not be collectible.

Prepare the adjusting entry for this company to recognize bad debts.(Round your intermediate calculations and and final answers to the nearest dollar amount. Omit the "$" sign in your response.)

Dec 31  Bad debts expense (?)

Allowance for doubtful accounts ( ?)

Prepare the adjusting entry for this company to recognize bad debts.(Round your intermediate calculations and and final answers to the nearest dollar amount. Omit the "$" sign in your response.)

Explanation / Answer

Solution :

Bad debts expense

     28,262

       allowance for doutful account

       28,262

allowance for doutful account

closing Balance required

     60,392

Less : debited (142000 x 11%)

     15,620

Less :Opening debit

     16,510

Bad debts to be recognised

     28,262

Bad debts expense

     28,262

       allowance for doutful account

       28,262

allowance for doutful account

closing Balance required

     60,392

Less : debited (142000 x 11%)

     15,620

Less :Opening debit

     16,510

Bad debts to be recognised

     28,262

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