I need help for Financial class?
The FFC recognizes bad debt expenses as 25% of total sales. When accounts are considered to be uncollectible they are written off against the"allowance".
During 20x4,FFC had total sales of $1,5000,000. In addition, FM Enterprises has declared bankruptcy and it appears their account for $650 will be uncollectible.
1. Prepare the journal entry to record bad debt expense
2. Prepare the journal entry to write off the FM Enterprises account
- Old GuyLv 77 years agoBest Answer
Debit Bad Debt Expense 375,000 [1,500,000 x 25%]
Credit Allowance for Doubtful Accounts 375,000
Debit Allowance for Doubtful Accounts 650
Credit Accounts Receivable 650