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Practice Problem #3: At the end of the year, two similar companies were in the process of calculating bad debt expense for the year.
Practice Problem #3: At the end of the year, two similar companies were in the process of calculating bad debt expense for the year. Each company had credit sales of $1,000,000 and a debit balance in Allowance for Uncollectible Accounts of $2,000 before any year-end adjustment. The balance of Accounts Receivable is $180,000. Company A estimates that 5% of accounts receivable will not be collected over the next year Determine the following: a) The uncollectible accounts expense for the year. b) The adjusting entry to be made of December 31. c) The balance in Allowance for Doubtful Accounts after adjustment.
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