Anonymous
Anonymous asked in Business & FinanceOther - Business & Finance · 4 weeks ago

How to record the end of period bad debt expense estimate and also how to record the write off of bad debts?

I need to record Journal Entries related to bad debts for year 3.

Information given:

Allowance for doubtful accounts: Year 3

Balance at Beginning of Period: $82

Additions (Charges) to Expense: $10

Write-offs: $8

Balance at End of Period: $84

As of right now I have it started as

TRANSACTION #1

                                                                  

Bad debt expense

        Allowance for doubtful accounts

TRANSACTION #2

Allowance for doubtful accounts

        Accounts receivable

I am unsure how to calculate the debits and credits of the following entires with the information given. I'm as well, unsure how to calculate the credit sales and bad debt expense/loss rate.

1 Answer

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  • Don G
    Lv 7
    4 weeks ago

    DR Bad Debt Expense 10 CR Allowance10

    DR Allowance 8 CR A/R 8

    If credit sales were 10,000 and Bad Debt Expense was 10, its bad debt expense ratio would be 10 / 10,000.

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