Question

E7-7.   (Recording Bad Debts) (LO 3) Duncan Company reports the following financial information before adjustments. Dr....

E7-7.  

(Recording Bad Debts)

(LO 3) Duncan Company reports the following financial information before adjustments.

Dr.

Cr.

Accounts Receivable

$100,000

Allowance for Doubtful Accounts

$  2,000

Sales Revenue (all on credit)

 900,000

Sales Returns and Allowances

  50,000

Instructions

Prepare the journal entry to record Bad Debt Expense assuming Duncan Company estimates bad debts at (a) 5% of accounts receivable and (b) 5% of accounts receivable but Allowance for Doubtful Accounts had a $1,500 debit balance.

Homework Answers

Answer #1

a)

Date

Particulars

Debit

Credit

Dec. 31

Bad debt expense ((100,000 * 5%) - 2,000)

3,000

        Allowance for doubtful accounts

3,000

b)

Date

Particulars

Debit

Credit

Dec. 31

Bad debt expense ((100,000 * 5%) +1,500)

6,500

        Allowance for doubtful accounts

6,500

I hope it is useful to u if u have any doubt pls comment give me up thumb

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