Santagos Industries gathered the following information from its accounting records for the year ended December 31, 2022, prior to adjustment: Net credit sales for the year $730,000 Accounts receivable balance, Dec. 31, 2022 142,000 The Allowance for Doubtful Accounts balance on the books for December 31, 2022, before journal entry above on Dec. 31, 2022, is $1,850. This is the balance in the contra Asset account that accompanies the Accounts Receivable account. It is deducted from the Accounts Receivable account balance to arrive at net receivables. The allowance amount recorded in the following journal entry is added to this amount to arrive at the amount the overall Allowance for Doubtful Accounts balance for year-end, December 31, 2022. Santagos uses the allowance method of accounting for uncollectible accounts and estimates bad-debt expense at 1.5% of net credit sales. Required: Prepare the adjusting entry to record bad-debt expense on December 31, 2022. Determine the balance in allowance for doubtful accounts after the adjusting entry is prepared. Show how the receivables would be reported on the December 31, 2022, balance sheet for Santagos Industries

Answer rating: 100% (QA)

Solution To prepare the adjusting entry to record baddebt expense on December 31 2022 we need to fol... View the full answer