ABC Corp. assessed their total credit sales to be $$1\mathrm{.}5$M$.$ The management have decided to create an allowance for doubtful debts of $2\%$ or $$30,000$ or higher. Please provide the journal entry for the following conditions:

a$.$ At the end of the year, the company had a Credit Balance of $$2,000$ in the bad debt allowance account. Provide the closing balance.

b$.$ At the end of the year, the company had a Debit Balance of $$3,000$ in the bad debt allowance account.

c$.$ Considering option $($b$),$ assume that a debtor paid $$500$ at the end of the year.

Answer rating: 100% (QA)

a If at the end of the year the company had a Credit Balance of 2000 in the bad debt allowance accou... View the full answer