CP$8-1($Algo$)$ Recording Accounts Receivable Transactions Using Two Estimation Methods $[$LO $8-2]$

Campbell$-$Wilson Corporation, is a software development company that recently reported the following amounts $($in thousands$)$ in its

unadjusted trial balance as of February $28,2019.$

Required:

Assume Campbell$-$Wilson uses $\frac{1}{4}$ of $1$ percent of revenue to estimate its bad debt expense for the year. Prepare the adjusting

journal entry required at February $28$ for recording Bad Debt Expense.

Assume instead that Campbell$-$Wilson uses the aging of accounts receivable method and estimates that $$6,900($thousand$)$ of

Accounts Receivable will be uncollectible. Prepare the adjusting journal entry required at February $28$ for recording bad debt

expense.

TIP: The aging of accounts receivable method focuses on calculating what the adjusted Allowance for Doubtful Accounts balance

should be$.$ You need to consider the existing balance when determining the adjustment.

Assume that the unadjusted balance in Campbell$-$Wilson's Allowance for Doubtful Accounts at February $28$ was a debit balance of

$$1,380($thousand$).$ Campbell$-$Wilson uses the aging of accounts receivable method and estimates that $$6,900($thousand$)$ of

Accounts Receivable will be uncollectible. Prepare the adjusting journal entry required at February $28$ for recording bad debt

expense.

If one of Campbell$-$Wilson's customers declared bankruptcy, what journal entry would be used to write off its $$690($thousand$)$

balance?