Question

1). Warner Company’s year-end unadjusted trial balance shows accounts receivable of $117,000, allowance for doubtful accounts...

1). Warner Company’s year-end unadjusted trial balance shows accounts receivable of $117,000, allowance for doubtful accounts of $780 (credit), and sales of $460,000. Uncollectibles are estimated to be 1.50% of accounts receivable.

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

2)Warner Company’s year-end unadjusted trial balance shows accounts receivable of $103,000, allowance for doubtful accounts of $640 (credit), and sales of $320,000. Uncollectibles are estimated to be 1% of sales.

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

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Answer #1

Solution 1:

Warner Company
Journal Entries
Date Particulars Debit Credit
31-Dec Bad debts expense Dr [($117,000*1.5%) - $780] $975.00
            To Allowance for doubtful accounts $975.00
(To record bad debts expense)

Solution 2:

Warner Company
Journal Entries
Date Particulars Debit Credit
31-Dec Bad debts expense Dr ($320,000*1%) $3,200.00
            To Allowance for doubtful accounts $3,200.00
(To record bad debts expense)
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