PMa Table of Contents eports Management estimates that 1% of the $100,000 of cre

Question

PMa Table of Contents eports Management estimates that 1% of the $100,000 of credit sales will be uncollectible. The Allowance for Doubtful Accounts has a $100 unadjusted debit balance. The adjusting entry to record estimated bad debts includes a (Select all that apply) Check all that apply credit to Allowance for Doubtful Accounts of $900 debit to Bad Debt Expense of $1.000 credit to Allowance for Doubtful Accounts of $1,100 credit to Allowance for Doubtful Accounts of $1,000 debit to Bad Debt Expense of $900 Bad Debt Expense will show a negative (or credit) balance of $1,100 Read about this Do you know the answer? I know it Think so No idea

Explanation / Answer

Select Option 2 & 4

- Debit to Bad Debt Expense of $1000

- Credit to Allowance for Doubtful Accounts of $1000

Bad Debt Expense fot the current year will be 1% of the credit sales

= $1,00,000 x 1%

= $1,000

The Journal Entry to record the above bad debt expense is as follows ;

Bad Debt A/c Dr $1,000

To Allowance for Doubtful Accounts A/c Cr $1000

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