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At January 1, 2020, the credit balance of Blue Spruce Corps Allowance for Doubtful Accounts was $400,000. During 2020, the bad debt expense entry was
At January 1, 2020, the credit balance of Blue Spruce Corps Allowance for Doubtful Accounts was $400,000. During 2020, the bad debt expense entry was based on a percentage of net credit sales. Net sales for 2020 were $79 million, of which 89% were on account. Based on the information available at the time, the 2020 bad debt expense was estimated to be 0.75% of net credit sales. During 2020, uncollectible receivables amounting to $496,500 were written off against the allowance for doubtful accounts. The company has estimated that at December 31, 2020, based on a review of the aged accounts receivable, the allowance for doubtful accounts would be properly measured at $520,500. Prepare a schedule calculating the balance in Blue Spruce Corps Allowance for Doubtful Accounts at December 31, 2020. Balance, January 1, 2020 $ $ 400,000 Bad debt expense accrual Uncollectible receivables written off 496,500 Balance, December 31, 2020 before adjustment Allowance adjustment Balance, December 31, 2020 $ $
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