Nichols Company uses the percentage of receivables method for recording bad debts expense. The accounts receivable balance is $250,000 and credit sales are $1,000,000. Management estimates that 4% of accounts receivable will be uncollectible. What adjusting entry will Nichols Company make if the Allowance for Doubtful Accounts has a credit balance of $2,500 before adjustment? A. Bad Debt Expense 7,500 Accounts Receivable 7,500 3. Bad Debt Expense 7,500 Allowance for Doubtful Accounts 7,500 Bad Debt Expense 10,000 Accounts Receivable 10,000 Bad Debt Expense 10,000 Allowance for Doubtful Accounts 10,000
Nichols Company uses the percentage of receivables method for recording bad debts expense. The accounts receivable balance is $250,000 and credit sales are $1,000,000. Management estimates that 4% of accounts receivable will be uncollectible. What adjusting entry will Nichols Company make if the Allowance for Doubtful Accounts has a credit balance of $2,500 before adjustment? A. Bad Debt Expense 7,500 Accounts Receivable 7,500 3. Bad Debt Expense 7,500 Allowance for Doubtful Accounts 7,500 Bad Debt Expense 10,000 Accounts Receivable 10,000 Bad Debt Expense 10,000 Allowance for Doubtful Accounts 10,000
College Accounting, Chapters 1-27
23rd Edition
ISBN:9781337794756
Author:HEINTZ, James A.
Publisher:HEINTZ, James A.
Chapter16: Accounting For Accounts Receivable
Section: Chapter Questions
Problem 2CE: Tonis Tech Shop has total credit sales for the year of 170,000 and estimates that 3% of its credit...
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