The December 31, 2014 unadjusted trial balance of Eel Creek Ltd. (Eel) disclosed the following balances:
Additionally, the firm has given up trying to collect on $19,000 from a customer who recently declared bankruptcy. Eel's management has not yet written off the amount but intends to do so before the company's books are closed for the year. The firm does not use the direct write-off method to estimate bad debt expense.
Provide the entry to record bad debt expense for 2014 assuming the firm uses the percentage of credit sales method for recording bad debt expense. On the average Eel has experienced a 8% rate of uncollectible accounts over the past 5 years.

Question

The December 31, 2014 unadjusted trial balance of Eel Creek Ltd. (Eel) disclosed the following balances:
  Additionally, the firm has given up trying to collect on $19,000 from a customer who recently declared bankruptcy. Eel's management has not yet written off the amount but intends to do so before the company's books are closed for the year. The firm does not use the direct write-off method to estimate bad debt expense.
Provide the entry to record bad debt expense for 2014 assuming the firm uses the percentage of credit sales method for recording bad debt expense. On the average Eel has experienced a 8% rate of uncollectible accounts over the past 5 years.

Quizplus · Accepted Answer

The Answer of The December 31, 2014 unadjusted trial balance of Eel Creek Ltd. (Eel) disclosed the following balances:
  Additionally, the firm has given up trying to collect on $19,000 from a customer who recently declared bankruptcy. Eel's management has not yet written off the amount but intends to do so before the company's books are closed for the year. The firm does not use the direct write-off method to estimate bad debt expense.
Provide the entry to record bad debt expense for 2014 assuming the firm uses the percentage of credit sales method for recording bad debt expense. On the average Eel has experienced a 8% rate of uncollectible accounts over the past 5 years.

The December 31, 2014 Unadjusted Trial Balance of Eel Creek