Question

Roberts Company had credit sales of $180,000 during 2012. The balance in Allowance for Doubtful Accounts...

Roberts Company had credit sales of $180,000 during 2012. The balance in Allowance for Doubtful Accounts is a $970 debit balance. Journalize the Bad Debts Expense for December 31 using each of the following methods: a. Bad Debts Expense is estimated at 1.0% of credit sales. b. The aging of Accounts Receivable indicates that $2,300 will be required in the Allowance account to cover Bad Debts Expense.

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Homework Answers

Answer #1

Credit sales = $180,000

Allowance for doubtful accounts, beginning = $970 (Debit balance)

a.

Bad debt expense = 1% of credit sales

= 180,000 x 1%

= $1,800

Journal

Date

Account Title and Explanation

Debit

Credit
Dce 31, 2012 Bad debt expense 1,800
Allowance for doubtful accounts 1,800
(To record bad debt expense)

b.

Allowance for doubtful accounts, ending = $2,300

Bad debt expense = Allowance for doubtful accounts, ending + Allowance for doubtful accounts, beginning (Debit)

= 2,300 + 970

= $3,270

Journal

Date

Account Title and Explanation

Debit

Credit
Dce 31, 2012 Bad debt expense 3,270
Allowance for doubtful accounts 3,270
(To record bad debt expense)

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