Alpha Company's accounts receivable and allowance for doubtful accounts balances were $100,000 and $14,000 (credit)respectively,at the beginning of Year 2.During Year 2,a customer defaults on a $12,000 balance related to goods purchased during Year 1.By the end of the year,the company had made credit sales of $2,400,000 and collected $2,200,000 on account.It now estimates that 1% of its credit sales will default.
A) Prepare the journal entry to write-off the bad debt.

Question

Alpha Company's accounts receivable and allowance for doubtful accounts balances were $100,000 and $14,000 (credit)respectively,at the beginning of Year 2.During Year 2,a customer defaults on a $12,000 balance related to goods purchased during Year 1.By the end of the year,the company had made credit sales of $2,400,000 and collected $2,200,000 on account.It now estimates that 1% of its credit sales will default.
 A) Prepare the journal entry to write-off the bad debt.

Quizplus · Accepted Answer

The Answer of Alpha Company's accounts receivable and allowance for doubtful accounts balances were $100,000 and $14,000 (credit)respectively,at the beginning of Year 2.During Year 2,a customer defaults on a $12,000 balance related to goods purchased during Year 1.By the end of the year,the company had made credit sales of $2,400,000 and collected $2,200,000 on account.It now estimates that 1% of its credit sales will default.
 A) Prepare the journal entry to write-off the bad debt.

Alpha Company's Accounts Receivable and Allowance for Doubtful Accounts Balances