1 As of December 31, Frappe Company has a balance of $7,000 In accounts recelvab

Q: 1 As of December 31, Frappe Company has a balance of $7,000 In accounts recelvab

Debit of $194 is correct answer. Bad debt for accounts not yet due ($6,300 x 3%) $189 Bad debt for accounts past due ($700 x10%) $70 Total $259 Less: Opening balance $65 Bad debts expense $194

ID: 2525003 • Letter: 1

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1 As of December 31, Frappe Company has a balance of $7,000 In accounts recelvable. Of this amount, $700 s past due and the remalnder is not yet due. Frappe has a credit balance of $65 In the Allowance for Doubtful Accounts. Frappe Company estimates its bad debt losses using the aging of recelvables method, with estimated bad debt loss rates equal to 3% of accounts not yet due and 10% of past due accounts. How will the Bad Debt Expense account be Included In the required adjusting Journal entry at year-end? Debit of $194 Debit of $199 O Debit of $65 O Credit of $259

Explanation / Answer

Debit of $194 is correct answer.

Bad debt for accounts not yet due ($6,300 x 3%) $189 Bad debt for accounts past due ($700 x10%) $70 Total $259 Less: Opening balance $65 Bad debts expense $194

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1 As of December 31, Frappe Company has a balance of $7,000 In accounts recelvab

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