HIRDT CO. USES THE PERCENTAGE-OF- RECEIVABLES BASIS TO RECORD BAD DEBT EXPENSE AND CONCLUDES THAT 3% OF ACCOUNTS RECEIVABLE WILL BECOME UNCOLLECTIBLE. ACCOUNTS RECEIVABLE ARE $401,100 AT THE END OF THE YEAR, AND THE ALLOWANCE FOR DOUBTFUL ACCOUNTS HAS A CREDIT BALANCE OF $3,110. IF THE ALLOWANCE FOR DOUBTFUL ACCOUNTS HAD A DEBIT BALANCE OF $890 INSTEAD OF A CREDIT BALANCE OF $3,110, PREPARE THE ADJUSTING JOURNAL ENTRY FOR BAD DEBT EXPENSE.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Entry for bad debt expenses

HIRDT CO. USES THE PERCENTAGE-OF-
RECEIVABLES BASIS TO RECORD BAD DEBT
EXPENSE AND CONCLUDES THAT 3% OF
ACCOUNTS RECEIVABLE WILL BECOME
UNCOLLECTIBLE. ACCOUNTS RECEIVABLE
ARE $401,100 AT THE END OF THE
YEAR, AND THE ALLOWANCE FOR
DOUBTFUL ACCOUNTS HAS A CREDIT
BALANCE OF $3,110.
IF THE ALLOWANCE FOR DOUBTFUL
ACCOUNTS HAD A DEBIT BALANCE OF
$890 INSTEAD OF A CREDIT BALANCE OF
$3,110, PREPARE THE ADJUSTING
JOURNAL ENTRY FOR BAD DEBT EXPENSE.
Transcribed Image Text:HIRDT CO. USES THE PERCENTAGE-OF- RECEIVABLES BASIS TO RECORD BAD DEBT EXPENSE AND CONCLUDES THAT 3% OF ACCOUNTS RECEIVABLE WILL BECOME UNCOLLECTIBLE. ACCOUNTS RECEIVABLE ARE $401,100 AT THE END OF THE YEAR, AND THE ALLOWANCE FOR DOUBTFUL ACCOUNTS HAS A CREDIT BALANCE OF $3,110. IF THE ALLOWANCE FOR DOUBTFUL ACCOUNTS HAD A DEBIT BALANCE OF $890 INSTEAD OF A CREDIT BALANCE OF $3,110, PREPARE THE ADJUSTING JOURNAL ENTRY FOR BAD DEBT EXPENSE.
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