At each calendar year-end, Mazie Supply Co. uses the percent of accounts receiva

Question

At each calendar year-end, Mazie Supply Co. uses the percent of accounts receivable method to estimate bad debts. On December 31, 2015, it has outstanding accounts receivable of $58,500, and it estimates that 2% will be uncollectible Prepare the adjusting entry to record bad debts expense for year 2015 under the assumption that the Allowance for Doubtful Accounts has: (a) a $995 credit balance before the adjustment (b) a $293 debit balance before the adjustment Journal Entry Worksheet Prepare the adjusting entry to record bad debts expense for year 2015 j under the assumption that the Allowance for Doubtful Accounts has a $995 credit balance before the adjustment.

Explanation / Answer

(1) Allowance for Bad debts Dr 995

Bad Debts Expenses A/c Dr 175

   To Debtors( Receivables ) 1170

(2) Bad Debts Expenses A/c Dr 877

To Debtors (Receivable) 877

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