Kingston Co. uses the percentage-of-receivables basis to record bad debt expense. It estimates that 1% of accounts

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Kingston Co. uses the percentage-of-receivables basis to record bad debt expense. It estimates that 1% of accounts receivable will become uncollectible. Accounts receivable are $420,000 at the end of the year, and the allowance for doubtful accounts has a credit balance of $1,500.
(a) Prepare the adjusting journal entry to record bad debt expense for the year.
(b) If the allowance for doubtful accounts had a debit balance of $800 instead of a credit balance of $1,500, determine the amount to be reported for bad debt expense.

Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that...
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Accounting Principles

ISBN: 9781118566671

11th Edition

Authors: Jerry Weygandt, Paul Kimmel, Donald Kieso

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