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27 September, 17:01

Craigmont uses the allowance method to account for uncollectible accounts. its year-end unadjusted trial balance shows accounts receivable of $108,500, allowance for doubtful accounts of $705 (credit) and sales of $945,000. if uncollectible accounts are estimated to be 0.7% of sales, what is the amount of the bad debts expense adjusting entry?

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  1. 27 September, 17:18
    0
    The answer is: $ 6,615.

    Explanation:

    If bad accounts are estimated at 0.7% of sales, and sales amount to $ 945,000, what you need to do is multiply $ 945,000 by 0.007 which is the result of dividing 0.7 by 100.

    The amount of the entry for adjustment of expenses for bad debts would be: $ 945,000 x 0.007 = $ 6,615.

    The answer is: $ 6,615.
  2. 27 September, 17:30
    0
    Amount of bad debts adjusting entry = 0.7% * 945,000 = 0.7/100 * 9450,000 = $6,615

    The amount of the bad debts expense adjusting entry = $6,615
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