Nash\'s Trading Post, LLC uses the percentage-of-receivables method for recordin

Question

Nash's Trading Post, LLC uses the percentage-of-receivables method for recording bad debt expense. The Accounts Receivable balance is $200000 and credit sales are $800000. Management estimates that 5% of accounts receivable will be uncollectible. What adjusting entry will Nash's Trading Post, LLC make if the Allowance for Doubtful Accounts has a credit balance of $2000 before adjustment?

Bad Debt Expense

4000

Allowance for Doubtful Accounts

4000

Bad Debt Expense

8000

Allowance for Doubtful Accounts

8000

Bad Debt Expense

6000

Accounts Receivable

6000

Bad Debt Expense

12000

Allowance for Doubtful Accounts

12000

Bad Debt Expense

4000

Allowance for Doubtful Accounts

4000

Explanation / Answer

A)bad debts expense 4000

Allowance for doubtful accounts 4000

Related Questions

Navigate

• Browse (All)
• Browse N
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.