Question

Ryan's Express has total credit sales for the year of $189,000 and estimates that 3% of its credit sales will be uncollectible. Record the end-of-period adjusting entry on December 31, in general journal form, for the estimated bad debt expense. Assume the following independent conditions existed prior to the adjustment:

a. Allowance for Doubtful Accounts has a credit balance of $925.
b. Allowance for Doubtful Accounts has a debit balance of $385.

Answer 1

a. Date Account title Debit Credit

Bad debt expenses $4,745

(3%*189,000 - $925)

Allowance for doubtful account $4,745

(To record the adjusting entry)

a. Date Account title Debit Credit

Bad debt expenses $1,505

(3%*189,000 - $385)

Allowance for doubtful account $1,505

(To record the adjusting entry)