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Prepare the entry to record bad debt expense

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Question - Wallace, Inc. had net sales in 2020 of P1,400,000. At December 31, 2020, before adjusting entries, the balances in selected accounts were Accounts Receivable P250,000 debit, and Allowance for Doubtful Accounts P2,400 credit.

a. If Wallace estimates that 8% of its receivables will prove to be uncollectible, prepare the December 31, 2020, journal entry to record bad debt expense.

b. Instead of an Allowance for Doubtful Accounts Balance of P2,400 credit, the balance was P1,900 debit. Assume that 10% of accounts receivable will prove to be uncollectible. Prepare the entry to record bad debt expense.

Reference no: EM132934944

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