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The December 31, 2019 unadjusted trial balance of a company disclosed the following balances: Accounts Receivable Allowance for Doubtful Accounts Sales Sales Returns and Allowances
The December 31, 2019 unadjusted trial balance of a company disclosed the following balances: Accounts Receivable Allowance for Doubtful Accounts Sales Sales Returns and Allowances $200,000 DR $1,000 CR $710,000 CR $10,000 DR Additionally, the firm has given up trying to collect on $5,000 of its accounts receivable but has not yet recorded the write-off entry. The firm does not use the direct write off method to estimate bad debt expense. Required a) b) c) Provide the entry for the write-off of the receivable Assume that after the firm recorded the $5,000 of write-offs and the firm uses the percentage of sales allowance method for recording bad debt expense. The firm has experienced an average 6% rate of non-collection based on sales, provide the entry to record bad debt expense for 2019. Assume that after the firm recorded the $5,000 of write-offs, it determined that 18% of its remaining accounts receivable will be uncollectible under the aging method. Provide the entry to record bad debt expense.
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