Using the Balance Sheet Method Practice Problem - ACCT 2050, University of Minnesota--Twin Cities

4. Using the Balance Sheet Method

in Topic 7 (Problem 4 of 4)

Hard

At December 31, a company has the following balances:

Accounts Receivable	35,000	Credit Sales	60,000
Allowance for Doubtful Accounts	500 (credit)	Cash	5,400

The company uses the balance sheet method to estimate bad debt. Management determined the estimate to be 3%. Under these circumstance, record the year-end adjusting entry for bad debt expense.

Journal Entry 1
Bad Debt Expense			550
	Allowance for Doubtful Accounts			550

	Click Here to View All Topic 7 Problems at Once	View
1	The Effect of Bad Debt Expense	Easy
2	Calculating Bad Debts	Moderate
3	The Effect of Uncollectible Accounts	Moderate
4	Using the Balance Sheet Method You are here.	Hard

1	A/R and Bad Debts Introduction	7:09
2	Direct Method	4:15
3	The Allowance Method	8:56
4	Income Statement vs Balance Sheet Methods	13:14
5	Net Credit Sales	5:20
6	Write Offs and Reinstatements	8:26

4. Using the Balance Sheet Method

The Rest Of The Practice Problems

Topic 7 Videos