Question

A company has​ $321,000 in credit sales. the company uses the allowance method to account for uncollectible accounts. the allowance for doubtful accounts now has an​ $8,150 debit balance. if the company estimates​ 5% of credit sales will be​ uncollectible, what will be the amount of the journal entry to record estimated uncollectible​ accounts?

Answer 1

321,000×0.05=16,050

Adjusted balance
16,050+8,150=24200

Journal entry
Bad debt expenses (Dr 16050)
Allowance for doubtful accounts (Cr 16050)