18.9k views
1 vote
Cosmo Company reported credit sales of $345,000 for the calendar year in its first year of operations. At December 31, customers buying on credit owed $35,000 to the company. Based on the experience of similar businesses, management estimates that $3,500 of its accounts receivable will be uncollectible.

Prepare the necessary December 31 adjusting entry by selecting the account names and dollar amounts from the drop-down menus.

1 Answer

3 votes

Answer:

Debit Bad debt expense $3,500

Credit Allowance account $3,500

Being entries to account for estimated uncollectible receivables as at 31 December.

Step-by-step explanation:

credit sales = $345,000

trade receivables = $35,000

estimate of uncollectible receivables = $3,500

the necessary adjusting entries on 31 December

Debit Bad debt expense $3,500

Credit Allowance account $3,500

Being entries to account for estimated uncollectible receivables as at 31 December.

User Bryan Hadlock
by
8.9k points
Welcome to QAmmunity.org, where you can ask questions and receive answers from other members of our community.