Relay Corp. estimates bad debt expense as 3% of credit sales. During year 1 Rela
ID: 2404777 • Letter: R
Question
Relay Corp. estimates bad debt expense as 3% of credit sales. During year 1 Relay sold $100,000 of goods on account. During year 2, Relay determines that a more accurate estimate of bad debts is 4% of credit sales. Year 2 sales on account was $300,000. The entry in year 2 to record the change in accounting estimate would include a debit to Read about this Sorry, your answer is incorrect bad debt expense for $13,000. uncollectible accounts for $13,000. allowance for uncollectible accounts for $12,000 Missed! bad debt expense for $12,000. Challenge OKExplanation / Answer
Entry to record bad debt expense is:
Bad debt expense is debited with $12,000 but not allowance account. Allowance account is credited.
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Particulars Debit Credit Bad debt expense 12000 Allowance for uncollectible accounts 12000