Question

journal entry worksheet
1
carlton company uses the percent of sales method to estimate its bad debt
expense. based on past experience, the company estimates 2 percent of credit
sales to be uncollectible. at the end of the current year, the companys
unadjusted trial balance shows accounts receivable of $245,000 and credit
sales of $900.000.
note: enter debits before credits.
general journal
date
debit
credit
december
31

Explanation:

Step1: Calculate bad debt expense

Bad debt expense = Credit sales × Estimated uncollectible percentage.
Bad debt expense = \(900000\times2\%= 18000\)

Step2: Record the journal entry

Debit Bad Debt Expense (to recognize the expense) and credit Allowance for Doubtful Accounts (a contra - asset account).

Answer:

Date	General Journal	Debit	Credit
	Allowance for Doubtful Accounts		\(18000\)