3 At December 31 Amy Jos Appliances had account balances in

3. At December 31, Amy Jo\'s Appliances had account balances in Accounts Receivable of $311,000 and in Allowance for Uncollectible Accounts of $970 (debit) before any adjustments. An analysis of Amy Jo\'s December 31 accounts receivable suggests that the allowance for uncollectible accounts should be 2% of accounts receivable. The adjusting entry would include a debit to Bad Debt Expense of A. $6,220. B. $6,450 C.$5,250 D. $7.190

Solution

D. $7,190

The adjusting entry would include a debit to Bad Debt Expense of:

= ($311,000 x 2%) + $970

= $7,190