Question
At January 1, 2020, the credit balance of Blue Spruce Corp.s Allowance for Doubtful Accounts was $411,000. During 2020, the bad debt expense entry was
At January 1, 2020, the credit balance of Blue Spruce Corp.s Allowance for Doubtful Accounts was $411,000. 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 0.80% of net credit sales. During 2020, uncollectible receivables amounting to $481,000 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 $526,500.
Prepare a schedule calculating the balance in Blue Spruce Corp.s Allowance for Doubtful Accounts at December 31, 2020.
Balance, January 1, 2020 | $enter a dollar amount | |
---|---|---|
Bad debt expense accrual | enter a dollar amount | |
enter a subtotal of the two previous amounts | ||
Uncollectible receivables written off | enter a dollar amount | |
Balance, December 31, 2020 before adjustment | enter a total amount for the first part | |
Allowance adjustment | enter a dollar amount | |
Balance, December 31, 2020 | $enter a total amount |
Prepare any necessary journal entry at year end to adjust the allowance for doubtful accounts to the required balance. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
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