At December 31, a company has the following balances:
| Accounts Receivable | 35,000 | Credit Sales | 60,000 |
| Allowance for Doubtful Accounts | 500 (credit) | Cash | 5,400 |
The company uses the balance sheet method to estimate bad debt. Management determined the estimate to be 3%. Under these circumstance, record the year-end adjusting entry for bad debt expense.
6. The Effect of Uncollectible Accounts Start Chapter 9| Journal Entry 1 | |||||
|---|---|---|---|---|---|
| Bad Debt Expense | 550 | ||||
| Allowance for Doubtful Accounts | 550 | ||||
| Click Here to View All Chapter 8 Problems at Once | View | ||
| 1 | Liability Classification | Easy | |
| 2 | The Effect of Bad Debt Expense | Easy | |
| 3 | Calculating Bad Debts | Moderate | |
| 4 | Contingent Liabilities | Moderate | |
| 5 | Contingent Liabilities - Warranties | Moderate | |
| 6 | The Effect of Uncollectible Accounts | Moderate | |
| 7 |
Using the Balance Sheet Method
You are here. |
Hard |
| 1 | A/R and Bad Debts Introduction | 7:09 | |
| 2 | Direct Method | 4:15 | |
| 3 | The Allowance Method | 8:56 | |
| 4 | Income Statement vs Balance Sheet Methods | 13:14 | |
| 5 | Net Credit Sales | 5:20 | |
| 6 | Write Offs and Reinstatements | 8:26 | |
| 7 | Notes Receivable | 11:27 | |
| 8 | Interest Bearing Notes | 8:26 | |
| 9 | Non-interest Bearing Notes | 6:16 | |
| 10 | Contingencies | 5:58 |