Question

The Accounts Receivable balance for Gold Company at December 31, 2017, was $30,000. During 2018, Gold eamed revenue of $452 000 on account and collected $328 000 on a count Gold wrote off S6,000 receivables as uno lectible. Industry expe ence suggests that uncollecti le accounts will amount to 3% of accounts receivable Read the requirements Requirement 1. Assume Gold had an unadjusted $1,900 credit balance in Allowance for Bad Debts at December 31. 2018. Journalize Gold's December 31, 2018, adjustment to record bad debts expense using the percent-of-receivables method. (Record debits first, then credits Select the explanation on the last line of the journal entry table.) Date Accounts and Explanation Debit Credit Dec. 31 Choose from any list or enter any number in the input fields and then continue to the next question.

Answer 1

Gold company

Opening Accounts receivable $30,000

Add Credit sales in the year $452,000

Less Payments received $328,000

Less uncollectible (write offs) $6,000

Closing Account receivables = $148,000

3% allowance for doubtful debt = $4,440

B.

Account balance in Allowance for doubtful debt = -$1,900

Right balance based on 3% -$4,440

Difference to be posted to credit of allowance account = -$2,540

Debit Bad & doubtful debts account with 2,540

Credit allowance for bad & doubtful debt account with 2,540