Splitter Corporation had total sales in the current year of $750,000 and credit sales of $650,000. The Accounts Receivable balance was $450,000 on the balance sheet date and the Allowance for Doubtful Accounts has a credit balance of $10,000 before adjusting entries. Bad debt expense is estimated as 2% of credit sales. The adjusting entry to record estimated bad debt expense would include a

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Answer:

$13,000

Explanation:

Given the above information, the adjusting entry to record estimated bad debt expense includes

= Credit sales × Estimated bad debt expense of credit sales

Given that

Credit sales = $650,000

Estimated bad debt of credit sales = 2%

= $650,000 × 2%

= $13,000

Therefore, the adjusting entry to record estimated bad debt expense includes $13,000

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