Accounting debit/credit question?

Question

Grade 12 accounting question?
Hi, please help me with the following question, given that a company's fiscal year ends on Dec 31 2008.

Clancy estimates that 7% of the Accounts Receivable balance on December 31, 2008, will become uncollectible (where there are $106,000 in A/R and $3,500 for Allowance for Doubtful accounts.

I am certain that you must debit Bad Debts Expense and credit Allowance for Doubtful Accounts but how much?

thank you

Answer 1

7% of $106,000 = $7,420. You already have $3,500 in your allowance a/c, so you only need another $3,920. Your entry:
Dr Doubtful debts expense 3,920 (or bad debts, if that's what your teacher taught you)
Cr Allowance for doubtful debts 3,920 (contra asset a/c)

Answer 2

I must know the balance in allowance for doubtful to answer this question.

Oh I know, you said 3,500.00. But, is it a debit or a credit?

If it was calculated on % of sales, the balance wouldn't matter.

Also, make sure the balance is 3,500. It seems like a lot, but it could be correct.

Jacob,
Submit additional info. under details.

Answer 3

C - corporation owes funds = money owed payable D - Why debit salaries? You won funds. G - Giving a shopper an bill = money owed Receivable H - funds - AR (won funds and it replaced into sitting in AR) a pair others look ordinary, yet i've got no longer been in an acccounting type for many some years.....