Saved OS 77 Percent of sales method LO P3 Warner Companys ye

Saved OS 7-7 Percent of sales method LO P3 Warner Company\'s year-end unadjusted trial balance shows accounts receivable of $106,000, allowance for doubtful accounts of $670 (credit), and sales of $350,000. Uncollectibles are estimated to be 0.50% of sales Prepare the December 31 year-end adjusting entry for uncollectibles View transaction list Journal entry worksheet Record the estimate of uncollectibles Note: Enter debits before credits. Dec 31 Record entry View general journal Clear entry

Solution

SOLUTION:

Adjusting entry for uncollectibles:

Dr. Bad debt expense $1,750

Cr. Allowance for doubtful accounts $1,750

(350,000 * 0.5% = 1,750