Explore BrainMass

Explore BrainMass

    Bad debts expense adjusting

    Not what you're looking for? Search our solutions OR ask your own Custom question.

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    Manning Company uses the percentage of receivables method for recording bad debts expense. The accounts receivable balance is $200,000 and credit sales are $1,000,000. Management estimates that 5% of accounts receivable will be uncollectable. What adjusting entry will Manning Company make if the Allowance for Doubtful Accounts has a credit balance of $2,000 before adjustment?

    © BrainMass Inc. brainmass.com March 4, 2021, 6:00 pm ad1c9bdddf
    https://brainmass.com/business/auditing/bad-debts-expense-adjusting-23164

    Solution Summary

    The solution calculated the adjusting entry the Manning Company will allow for doubtful accounts for a credit balance of $2000 before adjustment.

    $2.49

    ADVERTISEMENT