Question
Part A The following information is from the 2015 records of Armand Camera Shop: Accounts Receivable, December 31, 2015 $40,000 (debit) Allowance for Doubtful Accounts,
Part A
The following information is from the 2015 records of Armand Camera Shop:
Accounts Receivable, December 31, 2015 | $40,000 (debit) |
Allowance for Doubtful Accounts, December 31, 2015 prior to adjustment | 1,500 (debit) |
Net credit sales for 2015 | 175,000 |
Accounts written off as uncollectible during 2015 | 15,000 |
Cash sales during 2015 | 27,000 |
Bad debts expense is estimated by the aging-of-receivables method. Management estimates that $5,000 of accounts receivable will be uncollectible. Calculate the Allowance for Doubtful Accounts after the adjustment for bad debt expense at December 31, 2015.
| A.5250 |
| B.7000 |
| C. 5000 |
| D. 6500 |
Part B
The Allowance for Doubtful Accounts has a balance of $9,000. Management estimated that the uncollectible account is $5,000. Prepare the adjusting entry for bad debt expense.
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