Prepare the year-end adjusting entry for bad debts according to each of the following scenarios: a. Bad debt expense is estimated to be 5% of credit sales for the year. b. Bad debt expense is estimated by adjusting the allowance for uncollectible accounts to the balance that reduces the carrying value of accounts receivable to the amount of cash expected to be collected. The allowance for uncollectible accounts is estimated to be 10% of the year-end balance in the accounts receivable. c. For scenarios a and b above, what would be the net amount of accounts receivable reported in the 2019 balance sheet?
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.
Prepare the year-end
a. Bad debt expense is estimated to be 5% of credit sales for the year.
b. Bad debt expense is estimated by adjusting the allowance for uncollectible accounts to the balance that reduces the carrying value of
c. For scenarios a and b above, what would be the net amount of accounts receivable reported in the 2019
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