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Craigmont uses the allowance method to account for uncollectible accounts. Its year-end unadjusted trial balance shows Accounts Receivable of $128,500, allowance for doubtful accounts of $905 (credit) and sales of $1,045,000. If uncollectible accounts are estimated to be 6% of accounts receivable, what is the amount of the bad debts expense adjusting entry
Craigmont uses the allowance method to account for uncollectible accounts. Its year-end unadjusted trial balance shows Accounts Receivable of $128,500, allowance for doubtful accounts of $905 (credit) and sales of $1,045,000. If uncollectible accounts are estimated to be 6% of accounts receivable, what is the amount of the bad debts expense adjusting entry
ToAllowancefor Doubtful Debts is how much thebad debtexpenditure adjustment entry is worth. $7,105The calculation is as follows:Cost ofUncollectibleis= $128,500 × 6%= $7,710The bad debt iscurrently= $7,710 - $905= $7,105The correct entry would beDr. Bad Debt Account $7,105Including Doubtful Debts $7,105(Because a charge forbad debtis made)Here, the allowance is credited and the bad debt expenditure isdebitedbecause it reduced the assets while increasing the expenses. Additionally, the assets and costs have a typicalnegative balance.Learn more aboutbad debt, from :brainly.com/question/28988046#SPJ6...
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