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1 December, 08:39

Blue, Inc. had net sales in 2020 of $1,412,500. At December 31, 2020, before adjusting entries, the balances in selected accounts were Accounts Receivable $393,600 debit, and Allowance for Doubtful Accounts $1,922 debit. Assume that 10% of accounts receivable will prove to be uncollectible. Prepare the entry to record bad debt expense.

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  1. 1 December, 10:09
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    The journal entry to record the bad debt expense is shown below:

    Bad debt expense A/c Dr $41,282

    To Allowance for doubtful debts $41,282

    (Being bad debt expense is recorded)

    The computation of the bad debt expense is shown below:

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

    = ($393,600 * 10%) + $1,922

    = $39,360 + $1,922

    = $41,282
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