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Ryan's Express has total credit sales for the year of $189,000 and estimates that 3% of its credit sales will be uncollectible. Record the end-of-period adjusting entry on December 31, in general journal form, for the estimated bad debt expense. Assume the following independent conditions existed prior to the adjustment:

a. Allowance for Doubtful Accounts has a credit balance of $925.
b. Allowance for Doubtful Accounts has a debit balance of $385.

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Tundexi

Answer:

a. Date  Account title                             Debit    Credit

              Bad debt expenses                 $4,745

              (3%*189,000 - $925)

                     Allowance for doubtful account    $4,745                

              (To record the adjusting entry)

a. Date  Account title                             Debit    Credit

              Bad debt expenses                 $1,505

              (3%*189,000 - $385)

                     Allowance for doubtful account    $1,505                

              (To record the adjusting entry)

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