Prepare the necessary adjusting entries to record bad debt

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Reference no: EM13133520

At December 31 of the current year, a company reported the following:

Total sales for the current year: $780,000, includes $160,000 of cash sales. Accounts Receivable balance at December 31 of the current year: $190,000 Bad Debts written off during the year: $6,800 Balance of Allowance for Doubtful accounts at January 1, current year $8,300

Prepare the necessary adjusting entries to record bad debt expense assuming the company’s bad debts are estimated to equal:

1. 1.5% of credit sales
2. 5% of accounts receivable

Reference no: EM13133520

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