An analysis and aging of the accounts receivable of the dundas co. at december 31 reveals the following data: accounts receivable $800,000 allowance f
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hey there,
Bad Debts Expense 3,200
Allowance for Doubtful Accounts 3,200
Allowance for Doubtful Accounts needs an ending credit balance of 4% of $100,000 or $4,000. To increase the current credit balance of $800 to the required amount of $4,000, the account requires a credit of $3,200. The entry to estimate bad debts is a debit to Bad Debts Expense and a credit to Allowance for Doubtful Accounts for $3,200
Hope this helps!
Bad Debts Expense 3,200
Allowance for Doubtful Accounts 3,200
Allowance for Doubtful Accounts needs an ending credit balance of 4% of $100,000 or $4,000. To increase the current credit balance of $800 to the required amount of $4,000, the account requires a credit of $3,200. The entry to estimate bad debts is a debit to Bad Debts Expense and a credit to Allowance for Doubtful Accounts for $3,200
Hope this helps!
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