Adjustment for Uncollectible Accounts Evers Industries has c

Adjustment for Uncollectible Accounts Evers Industries has computed that the proper balance for the Allowance for Doubtful Accounts at July 31 is $106,106. Assume that the allowance for doubtful accounts for Evers Industries has a credit balance of $8,240 before adjustment on July 31 Journalize the adjusting entry for uncollectible accounts as of July 31 July 31 Bad Debt ExpenseY Allowance for Doubtful Accounts

Solution

Since we already have a credit balance of $8240 in the account, only the difference between the required allowance and already existing balance needs to be booked as bad debt expense to bring the credit balance in allowance account to its desirable balance.

By passing this entry credit balance in allowance aacount will increase to (8240+97866) = $106106 which is the estimated balance for July 31

Credit balance in allowance for doubtful debts account (A)	8240
Estimated balance for July 31 (B)	106106
Bad Debt Expense to be booked (C=A-B)	97866