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At December 31, 2015, Ingleton Company reports the following results for the year: Cash sales Credit sales $1,025
At December 31, 2015, Ingleton Company reports the following results for the year: Cash sales Credit sales $1,025.000 1.342.000 In addition, its unadjusted trial balance includes the following items: Accounts receivable Allowance for doubtful accounts $575.000 debit 7.500 credit B. Dec 31, 2015 the company estimated bad debts as 3% of Account Receivable. Feb 15, 2016, the company determined that it can not collect $15,000 of its account receivable from customer Aldo April 1, 2016, the company received the payment $15,000 from Customer Aldo Date Account Title Debit Credit Asset How much is Bad debt expense using 3% of Account Receivable method?
Expert Solution
| Bad debt expense using accounts receivable method | |||
| 3% of accounts receivable - Credit balance of allowance for doubful debt | |||
| = | 3% of $575,000 - $7,500 | ||
| = | $9,750 |
| Dr | Allowance for doubtful debt | Cr | |
| Beg. Bal | $7,500 | ||
| Bad Debt Exp | $9,750 | ||
| End. Bal | $17,250 |
| Date | Account Titles & Explanation | Debit | Credit |
| 31-Dec-15 | Bad Debt Expense | $9,750 | |
| Allowance for doubtful accounts | $9,750 | ||
| (Being Bad debt expense recorded) |
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