63
Chapter 2
Accounting for Receivables
b) Assume the company uses the balance sheet approach and estimates uncollectible
receivables to be 7.5% of accounts receivable. Prepare the journal entry to record bad debt
expense on December 31, 2016.
Date
Account Title and Explanation
Debit
Credit
c) Assume the AFDA has a debit balance of $2,000 on December 31, 2016. Using the balance
sheet approach and estimating that 7.5% of receivables will be uncollectable, prepare the
journal entry to record the bad debt expense on December 31, 2016.
Date
Account Title and Explanation
Debit
Credit
AP-7B (
2
)
Jane Lee is the owner of a small consulting firm called Lee Solutions. On April 14, 2016, Lee
Solutions’ accounts receivable account balance was $10,000. A week later, it was discovered
that Mr. Joe Black, who owed the firm $1,500, would not be able to make the payment.
Required
a) Prepare a journal entry to write off the amount deemed uncollectible.
Date
Account Title and Explanation
Debit
Credit
