Chapter 16, Problem 2CE

Toni’s Tech Shop has total credit sales for the year of $170,000 and estimates that 3% of its credit sales will be uncollectible. Allowance for Doubtful Accounts has a credit balance of $275.

Prepare the adjusting entry at year-end for the estimated bad debt expense.

1. (a) Based on an aging of its accounts receivable, Kyle’s Cyclery estimates that $3,200 of its year-end accounts receivable will be uncollectible. Allowance for Doubtful Accounts has a debit balance of $280 at year-end.

Prepare the adjusting entry at year-end for the estimated uncollectible accounts.