Question

Kirov, Inc. reports credit sales of $200,000 for the year ending December 31. The year-end unadjusted balance of its Allowance for Doubtful Accounts is a debit of $9,000. Experience suggests 6 percent of its net sales will be uncollectible. The amount that should be debited to Bad Debt Expense and credited to Allowance for Doubtful Accounts in its year-end adjusting entry is

Answer 1

$12,000

Step-by-step explanation:

The computation of the amount that should be debited to bad debt expense and credited to the allowance for doubtful account is shown below:

= Credit sales × uncollectible percentage

= $200,000 × 6%

= $12,000

Hence, the same would be shown in the adjusting entry