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Adjusting entry for uncollectible accounts

At the end of Year 2, the unadjusted trial balance of Alaska Company includes $1,500,000 of outstanding accounts receivable and an Allowance for Uncollectible Accounts of $14,600. Total sales for the year are $22,200,000 and 85% of the sales were on account. The company estimates that 1.8% of credit sales are uncollectible and no entries have been made during the year to reflect these uncollectibles.

Prepare the adjusting entry for the allowance for uncollectible accounts.

Solution Preview

The credit sales are 22,200,000X0.85 = 18,870,000.
1.8% of these are ...

Solution Summary

The solution explains how to pass the adjusting entry for uncollectible accounts