Ask Question
24 December, 16:19

Indigo, Inc. had net sales in 2020 of $1,471,700. At December 31, 2020, before adjusting entries, the balances in selected accounts were Accounts Receivable $385,300 debit, and Allowance for Doubtful Accounts $4,410 credit. If Indigo estimates that 6% of its receivables will prove to be uncollectible. Prepare the December 31, 2020, journal entry to record bad debt expense

+4
Answers (1)
  1. 24 December, 16:44
    0
    December 31, 2020

    Dr Bad Debt expense 18,690 Cr Allowance For Doubtful Accounts account 18,690

    Explanation:

    First we need to determine the total amount of uncollectible accounts receivable = $385,600 x 6% = $23,100

    Then we must subtract the amount already recorded in allowance for doubtful accounts from our total uncollectible accounts = $23,100 - $4,410 = $18,690

    We have to debit the difference and credit the contra asset account:

    Dr Bad Debt expense 18,690

    Cr Allowance For Doubtful Accounts account 18,690
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “Indigo, Inc. had net sales in 2020 of $1,471,700. At December 31, 2020, before adjusting entries, the balances in selected accounts were ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers