On December 31, 2018, the balance in Megan's Products Accounts Receivable was $680,000 and net credit sales amounted to $3,800,000 during 2018. An aging analysis of the accounts receivable indicated that $40,000 in accounts are expected to be uncollectible.
Instructions
Prepare the adjusting entries to record estimated bad debt expense using the percentage-of-receivables basis under each of the following independent assumptions:
(a) Allowance for Doubtful Accounts has a credit balance of $3,200 before adjustment.
(b) Allowance for Doubtful Accounts has a debit balance of $730 before adjustment.

Question

Quizplus · Accepted Answer

The Answer of On December 31, 2018, the balance in Megan's Products Accounts Receivable was $680,000 and net credit sales amounted to $3,800,000 during 2018. An aging analysis of the accounts receivable indicated that $40,000 in accounts are expected to be uncollectible.
Instructions
Prepare the adjusting entries to record estimated bad debt expense using the percentage-of-receivables basis under each of the following independent assumptions:
(a) Allowance for Doubtful Accounts has a credit balance of $3,200 before adjustment.
(b) Allowance for Doubtful Accounts has a debit balance of $730 before adjustment.

On December 31, 2018, the Balance in Megan's Products Accounts