Ask Question
9 March, 10:41

The trial balance before adjustment of Taylor Swift Inc. shows the following balances.

DrCr

Accounts Receivable90,000

Allowance for Doubtful Accounts1,750

Sales Revenue (all on credit) $680,000

Give the entry for estimated bad debts assuming that the allowance is to provide for doubtful accounts on the basis of a 4% of gross accounts receivable and (b) 5% of gross accounts receivable and Allowance for Doubtful Accounts has a $1,700 credit balance.

+3
Answers (1)
  1. 9 March, 13:55
    0
    The journal entries are shown below;

    a. Bad debt expense A/c Dr $5,350

    To Allowance for doubtful debts $5,350

    (Being bad debt expense is recorded)

    The computation of the bad debt expense is shown below:

    = Account receivable * estimated percentage given + debit balance of Allowance for Doubtful Accounts

    = $90,000 * 4% + $1,750

    = $5,350

    B. Bad debt expense A/c Dr $2,800

    To Allowance for doubtful debts $2,800

    (Being bad debt expense is recorded)

    The computation of the bad debt expense is shown below:

    = Account receivable * estimated percentage given - credit balance of Allowance for Doubtful Accounts

    = $90,000 * 5% - $1,7000

    = $2,800
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “The trial balance before adjustment of Taylor Swift Inc. shows the following balances. DrCr Accounts Receivable90,000 Allowance for ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers