Warner Company's year-end unadjusted trial balance shows accounts receivable of $99,000, allowance for doubtful accounts of $600 (credit), and sales of $280,000. Uncollectibles are estimated to be 0.5% of sales.

Prepare the December 31 year-end adjusting entry for uncollectibles.

Question

Uriel Hooper

Business

28 November, 06:35

Warner Company's year-end unadjusted trial balance shows accounts receivable of $99,000, allowance for doubtful accounts of $600 (credit), and sales of $280,000. Uncollectibles are estimated to be 0.5% of sales.

Prepare the December 31 year-end adjusting entry for uncollectibles.

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Karma Steele · Answer 1

The journal entry to record the uncollectible is shown below:

On December 31

Bad debt expense $800

To Allowance for doubtful debts $800

(Being the bad debt expense is recorded)

The computation is shown below:

= Sales * estimated percentage - credit balance of doubtful accounts

= $280,000 * 0.5% - $600

= $1,400 - $600

= $800

Warner Company's year-end unadjusted trial balance shows accounts receivable of $99,000, allowance for doubtful accounts of $600 (credit), and sales of $280,000. Uncollectibles are estimated to be 0.5% of sales.Prepare the December 31 year-end adjusting entry for uncollectibles.

Warner Company's year-end unadjusted trial balance shows accounts receivable of $99,000, allowance for doubtful accounts of $600 (credit), and sales of $280,000. Uncollectibles are estimated to be 0.5% of sales.

Prepare the December 31 year-end adjusting entry for uncollectibles.