Max Industries changed its method of accounting for bad debts from the direct write-off method to the allowance method on January 1, 2009. The company's accountant determined that an appropriate allowance of $90,000 should be established. Ignore income taxes.
Required:
Prepare the journal entry to record the accounting change.

Question

Quizplus · Accepted Answer

The Answer of Max Industries changed its method of accounting for bad debts from the direct write-off method to the allowance method on January 1, 2009. The company's accountant determined that an appropriate allowance of $90,000 should be established. Ignore income taxes.
Required:
Prepare the journal entry to record the accounting change.

Max Industries Changed Its Method of Accounting for Bad Debts