A company uses the percentage of credit sales method to


Question - A company uses the percentage of credit sales method to account for bad debt expense. As of year end the company reported the following unadjusted balances: Accounts receivable $258,000; Allowance for doubtful accounts (a debit balance) $800 and Net Credit Sales $950,000. Based on past experience the company estimates that approximately 2% of credit sales are uncollectible. What amount should be debited to Bad Debt Expense when the year-end adjusting journal entry is made?

Solution Preview :

Prepared by a verified Expert
Accounting Basics: A company uses the percentage of credit sales method to
Reference No:- TGS02396735

Now Priced at $25 (50% Discount)

Recommended (93%)

Rated (4.5/5)