Answer:
Debit Bad debt expense $9,257
Credit Allowance for doubtful accounts $9,257
(To record bad debt expense during the year)
So the amount of adjusting entry is $9,257.
Explanation:
The estimated total uncollectible amount was given as $6,622 meanwhile the company had a debit balance of $2,635 prior to the adjustment. This means $2,635 would be added to $6,622 to arrive at $9,257. That amount would serve as the adjusting amount in order to reinstate the balance in the allowance for doubtful accounts to $6,622.
So net realizable value of accounts receivable would be $38,098 ($44,720 - $6,622).
Answer:
Uncollectible Accounts Expense $ 9257
Explanation:
Accounts Receivable balance $ 44,720
The estimated total uncollectible accounts $ 6,622.
Unadjusted Allowance for Uncollectible Accounts 2,635 Dr.
Adjustment Required ( $ 6,622+ 2,635)= $ 9257
Adjusted Allowance for Uncollectible Accounts $ 9257 Cr
The Allowance for Uncollectibles must always have a credit balance . As we have a debit balance we add it to get the required credit balance adjusting amount.
The amount of the adjusting entry for
Uncollectible Accounts Expense is $ 9257
and the entry is
Bad debts Expense $ 9257 Dr.
Allowance for Uncollectibles $ 9257 Cr.
