Question

Miller Products uses the allowance method in estimating uncollectible accounts. On December 31, 2022, the balance...

Miller Products uses the allowance method in estimating uncollectible accounts. On December 31, 2022, the balance in Accounts Receivable was $690,000. An aging analysis of the accounts receivable indicated that $29,400 in accounts are expected to be uncollectible.

Prepare the adjusting entry to record estimated bad debts expense using the percentage of receivables basis under each of the following independent assumptions:

Allowance for Doubtful Accounts has a credit balance of $3,900 before adjustment. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.)

Account Titles and Explanation

Debit

Credit

Enter an account title Enter a debit amount Enter a credit amount
Enter an account title Enter a debit amount Enter a credit amount

SHOW LIST OF ACCOUNTS

Allowance for Doubtful Accounts has a debit balance of $870 before adjustment. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.)

Account Titles and Explanation

Debit

Credit

Enter an account title Enter a debit amount Enter a credit amount
Enter an account title Enter a debit amount Enter a credit amount

Homework Answers

Answer #1

Answer :- Adjusting Journal Entries:-

1. Allowance for doubtful accounts has a credit balance of $3,900 before adjustment :-

Bad debt expense a/c Dr $25,500

To Allowance for doubtful accounts A/c $25,500

( $29,400 - $3,900 = $25,500)

2. Allowance for doubtful accounts has a debit balance of $870 before adjustment :-

Bad debt expense a/c Dr $30,270

To Allowance for doubtful accounts A/c $30,270

( $29,400 + $870 = $30,270)

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