Byrd Co uses the percentage of receivables basis to record bad debt expense and concludes that 2 of accounts receivable will become uncollectible Accounts receivable are $400,000 at the end of the year, and the allowance for doubtful accounts has a credit balance of $2,800 (a) Prepare the adjusting...

a Bad Debt Expense 400000 2 2800 ...

Byrd Co. uses the percentage-of-receivables basis to record bad debt expense and concludes that 2% of accounts

Question:

Byrd Co. uses the percentage-of-receivables basis to record bad debt expense and concludes that 2% of will become uncollectible. are $400,000 at the end of the year, and the allowance for doubtful accounts has a credit balance of $2,800.
(a) Prepare the adjusting journal entry to record bad debt expense for the year.
(b) If the allowance for doubtful accounts had a debit balance of $900 instead of a credit balance of $2,800, prepare the adjusting journal entry for bad debt expense.
Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that...