Question

Entry for Uncollectible Accounts Performance Bike Co. has determined that the proper balance for the Allowance for Doubtful Accounts at December 31 is $39,044. Assume that the allowance for doubtful accounts for Performance Bike Co. had a debit balance of $7,030 as of December 31. Journalize the adjusting entry for uncollectible accounts as of December 31.

Answer 1

Answer: This transaction can be Journalized as follows :-

December 31.       Bad debt expense A/C Dr.  $46,074

                                        To allowance for doubtful accounts $46,074

                               (adjusting allowance account to total uncollectibles)

Explanation:

bad debt expense = doubtful accounts debit balance + desired balance for doubtful accounts

                              = $39044 + $7030

                              =$ 46,074