Adria Lopez, owner of Success Systems, realizes that she needs to begin accounti

Question

Adria Lopez, owner of Success Systems, realizes that she needs to begin accounting for bad debts expense. Assume that Success Systems has total revenues of $64,000 during the first three months of 2014, and that the Accounts Receivable balance on March 31, 2014, is $22,317. Required: 1a. Prepare the adjusting entry needed for Success Systems to recognize bad debts expense, which are estimated to be 1% of total revenues on March 31, 2014 (assume a zero unadjusted balance in the Allowance for Doubtful Accounts at March 31).

Explanation / Answer

Adjusting entry :

Date accounts & explanation debit credit Bad debt expense (64000*1%) 6400 Allowance for doubtful accounts 6400 (To record adjusting entry)

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

---

---

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