On January 1, 2017, the balance in Great Lakes Co.'s Allowance for Bad Debts account was $15,600. During the year, a total of $10,500 of delinquent accounts receivable were written off as bad debts. The balance in the Allowance for Bad Debts account at December 31, 2017, was $21,900. Question: As a result of comprehensive analysis, it is determined that the December 31, 2017, balance of Allowance for Bad Debts should be $18,900. Show, in general journal format the adjustment required.
Bad Debts
At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
On January 1, 2017, the balance in Great Lakes Co.'s Allowance for
Question: As a result of comprehensive analysis, it is determined that the December 31, 2017, balance of Allowance for Bad Debts should be $18,900. Show, in general journal format the adjustment required.
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