Question
Torres, Inc. uses an aged account receivable schedule to estimate its bad debt expenses. They had the following balances for their accounts receivable before any
Torres, Inc. uses an aged account receivable schedule to estimate its bad debt expenses. They had the following balances for their accounts receivable before any year-end adjustments: Accounts Receivable Balances Estimated Uncollectible Current $312,000 1% 30 to 60 days overdue $22,000 5% 61 to 90 days overdue $5,000 25% over 90 days overdue $2,000 70% The balance in the Allowance for Doubtful Accounts before adjustments was $3,500. a. Prepare the journal entry to record bad debt expense for the period. b. At the beginning of the next accounting period, the company discovered that one customer had declared bankruptcy and therefore would not pay his account. His balance was $500. Prepare the journal entry to record the write-off.
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