Textbook Problem

UNCOLLECTIBLE ACCOUNTS—PERCENTAGE OF SALES Rossin’s Racers has total credit sales for the year of $280,000 and estimates that 3% of its credit sales will be uncollectible. Record the end-of-period adjusting entry on December 31, in general journal form, for the estimated bad debt expense. Assume the following independent conditions existed prior to the adjustment:

1. 1. Allowance for Doubtful Accounts has al credit balance of $570.
2. 2. Allowance for Doubtful Accounts has a debit balance of $360.