Kinsler Company uses the percentage-of-receivables method for recording bad debt expense. The Accounts Receivable balance is $200,000 and credit sales are $1,000,000. Management estimates that 6% of accounts receivable will be uncollectible. What adjusting entry will Kinsler Company make if the Allowance for Doubtful Accounts has a credit balance of $2,000 before adjustment? $\begin{array}{lll}
\text { a. Bad Debt Expense } & 14,000 & \
\text { Allowance for Doubtful Accounts } & &14,000 \
\text { b. Bad Debt Expense } &12,000 \
\text { Allowance for Doubtful Accounts } && 12,000 \
\text { c. Bad Debt Expense } & 10,000 & \
\text {Allowance for Doubtful Accounts} & & 10,000 \
\text { d. Bad Debt Expense } & 8,000 & \
\text { Accounts Receivable } & & 8,000
\end{array}$

Question

Kinsler Company uses the percentage-of-receivables method for recording bad debt expense. The Accounts Receivable balance is $200,000 and credit sales are $1,000,000. Management estimates that 6% of accounts receivable will be uncollectible. What adjusting entry will Kinsler Company make if the Allowance for Doubtful Accounts has a credit balance of $2,000 before adjustment? $\begin{array}{lll}
\text { a. Bad Debt Expense } & 14,000 & \
\text { Allowance for Doubtful Accounts } & &14,000 \
\text { b. Bad Debt Expense } &12,000 \
\text { Allowance for Doubtful Accounts } && 12,000 \
\text { c. Bad Debt Expense } &  10,000 &  \
\text {Allowance for Doubtful Accounts} & & 10,000 \
\text { d. Bad Debt Expense } & 8,000  & \
\text { Accounts Receivable } & & 8,000 
\end{array}$

Quizplus · Accepted Answer

The Answer of Kinsler Company uses the percentage-of-receivables method for recording bad debt expense. The Accounts Receivable balance is $200,000 and credit sales are $1,000,000. Management estimates that 6% of accounts receivable will be uncollectible. What adjusting entry will Kinsler Company make if the Allowance for Doubtful Accounts has a credit balance of $2,000 before adjustment? $\begin{array}{lll}
\text { a. Bad Debt Expense } & 14,000 & \
\text { Allowance for Doubtful Accounts } & &14,000 \
\text { b. Bad Debt Expense } &12,000 \
\text { Allowance for Doubtful Accounts } && 12,000 \
\text { c. Bad Debt Expense } &  10,000 &  \
\text {Allowance for Doubtful Accounts} & & 10,000 \
\text { d. Bad Debt Expense } & 8,000  & \
\text { Accounts Receivable } & & 8,000 
\end{array}$

Kinsler Company Uses the Percentage-Of-Receivables Method for Recording Bad Debt