Pronghorn, Inc. had net sales in 2017 of $1,476,200. At December 31, 2017, before adjusting entries, the balances in selected accounts were Accounts Receivable $257,500 debit, and Allowance for Doubtful Accounts $1,877 debit. Assume that 11% of accounts receivable will prove to be uncollectible. Prepare the entry to record bad debt expense

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Business

Camilla Bradshaw

1 June, 06:50

Pronghorn, Inc. had net sales in 2017 of $1,476,200. At December 31, 2017, before adjusting entries, the balances in selected accounts were Accounts Receivable $257,500 debit, and Allowance for Doubtful Accounts $1,877 debit. Assume that 11% of accounts receivable will prove to be uncollectible. Prepare the entry to record bad debt expense

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Esteban Wade · Answer 1

bad debt expense 26,448 debit

allowance for doubful accounts 26,448 credit

--to record adjustment for bad debt expense--

Explanation:

From the current Account receivables 11% will be doubful account

257,500 x 11% = 28,325

Now, we adjust the allowance to match this amount:

28,325 - 1,877 = 26,448‬

we increase the allowance against the bad debt expense