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16 November, 06:44

Knelling Company reported a balance in Accounts Receivable of $50,000 and a credit balance of $3,000 in the Allowance for Doubtful Accounts. The company's aging of accounts receivable determined $12,000 to be uncollectible. Prepare the end-of-period adjusting entry to record bad debit expence.

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  1. 16 November, 07:10
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    Bad Debt A/c Dr $9,000

    To Credit Allowance for Bad & Doubtful A/c $9,000

    Explanation:

    According to the scenario, the given data are as follows:

    Accounts receivable = $50,000

    Credit balance in Allowance for doubtful A/c = $3,000

    Uncollectible Amount = $12,000

    So, Bad debts = Uncollectible Amount - Credit balance in Allowance for doubtful A/c

    = $12,000 - $3,000

    = $9,000

    So, the journal entry are given below:

    Bad Debt A/c Dr $9,000

    To Credit Allowance for Bad & Doubtful A/c $9,000

    (Being the Bad debt A/c is recorded)
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