The following selected amounts are reported on the year-end unadjusted trial balance report for a company that uses the percent of sales method to determine its bad debts expense.
Accounts receivable $ 442,000 Debit
Net Sales 2,170,000 Credit
All sales are made on credit. Based on past experience, the company estimates 2.0% of sales to be uncollectible. What adjusting entry should the company make at the end of the current year to record its estimated bad debts expense?

Question

The following selected amounts are reported on the year-end unadjusted trial balance report for a company that uses the percent of sales method to determine its bad debts expense.

Accounts receivable	$ 442,000	Debit
Net Sales	2,170,000	Credit

All sales are made on credit. Based on past experience, the company estimates 2.0% of sales to be uncollectible. What adjusting entry should the company make at the end of the current year to record its estimated bad debts expense?

Answer

Debit Bad Debts Expense $42,080; credit Allowance for Doubtful Accounts $42,080.

Answer

Debit Bad Debts Expense $10,160; credit Allowance for Doubtful Accounts $10,160.

Answer

Debit Bad Debts Expense $8,840; credit Allowance for Doubtful Accounts $8,840.

Answer

Debit Bad Debts Expense $44,720; credit Allowance for Doubtful Accounts $44,720.

Answer

Debit Bad Debts Expense $43,400; credit Allowance for Doubtful Accounts $43,400.

Crowdly

The following selected amounts are reported on the year-end unadjusted trial bal...

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