Oriole Company uses the percentage of receivables method for recording bad debt expense. The accounts receivable balance is $ 603000 and credit sales are $ 2730000. Management estimates that 4% of accounts receivable will be uncollectible. What adjusting entry will Oriole Company make to record bad debt expense if the Allowance for Doubtful Accounts has a $ 4500 credit balance before adjustment? Bad Debt Expense 24120 Accounts Receivable 24120 Bad Debt Expense 19620 Allowance for Doubtful 19620 Accounts Bad Debt Expense 19620 Accounts Receivable 19620

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
icon
Concept explainers
Question
Practice Pack
### Question 8 of 33 

**Current Attempt in Progress**

Oriole Company uses the percentage of receivables method for recording bad debt expense. The accounts receivable balance is $603,000 and credit sales are $2,730,000. Management estimates that 4% of accounts receivable will be uncollectible. What adjusting entry will Oriole Company make to record bad debt expense if the Allowance for Doubtful Accounts has a $4,500 credit balance before adjustment?

- **Option 1:**
  - Bad Debt Expense: $24,120
  - Accounts Receivable: $24,120

- **Option 2:**
  - Bad Debt Expense: $19,620
  - Allowance for Doubtful Accounts: $19,620

- **Option 3:**
  - Bad Debt Expense: $19,620
  - Accounts Receivable: $19,620

This question involves calculating the appropriate adjustment for bad debt expense based on a percentage of receivables method, considering existing balances and estimated uncollectibles.
Transcribed Image Text:### Question 8 of 33 **Current Attempt in Progress** Oriole Company uses the percentage of receivables method for recording bad debt expense. The accounts receivable balance is $603,000 and credit sales are $2,730,000. Management estimates that 4% of accounts receivable will be uncollectible. What adjusting entry will Oriole Company make to record bad debt expense if the Allowance for Doubtful Accounts has a $4,500 credit balance before adjustment? - **Option 1:** - Bad Debt Expense: $24,120 - Accounts Receivable: $24,120 - **Option 2:** - Bad Debt Expense: $19,620 - Allowance for Doubtful Accounts: $19,620 - **Option 3:** - Bad Debt Expense: $19,620 - Accounts Receivable: $19,620 This question involves calculating the appropriate adjustment for bad debt expense based on a percentage of receivables method, considering existing balances and estimated uncollectibles.
Expert Solution
trending now

Trending now

This is a popular solution!

video

Learn your way

Includes step-by-step video

steps

Step by step

Solved in 2 steps

Blurred answer
Knowledge Booster
Receivables Management
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education