Knelling Company reported a balance in Accounts Receivable of $50,000 and a credit balance of $3,000 in the Allowance for Doubtful Accounts. The company's aging of accounts receivable determined $12,000 to be uncollectible. Prepare the end-of-period adjusting entry to record bad debit expence.

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Business

Admiral

21 April, 05:40

Knelling Company reported a balance in Accounts Receivable of $50,000 and a credit balance of $3,000 in the Allowance for Doubtful Accounts. The company's aging of accounts receivable determined $12,000 to be uncollectible. Prepare the end-of-period adjusting entry to record bad debit expence.

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Brit · Answer 1

Bad Debt A/c Dr $9,000

To Credit Allowance for Bad & Doubtful A/c $9,000

Explanation:

According to the scenario, the given data are as follows:

Accounts receivable = $50,000

Credit balance in Allowance for doubtful A/c = $3,000

Uncollectible Amount = $12,000

So, Bad debts = Uncollectible Amount - Credit balance in Allowance for doubtful A/c

= $12,000 - $3,000

= $9,000

So, the journal entry are given below:

Bad Debt A/c Dr $9,000

To Credit Allowance for Bad & Doubtful A/c $9,000

(Being the Bad debt A/c is recorded)