Question - Annendale fashions has a receivables balances of $14,600 at the end of the year. Based on past history, annendale fashions estimates that it will not collect 2% of its receivables balance. Prior to any year-end adjustment, the balance in the allowance account is a $210 debit.
Required:
a. Prepare the journal entry to record the bad debt expense for the year.
Show your calculation of bad debt expense in T-account form. If an amount box does not require an entry, leave it blank or enter "0".
b. Assume that $100 credit instead of the $210 debit. What is bad expense in this situation.
Show calculation in T-account form. If an account box does not require an entry, leave it blank or enter "0".