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At the end of year 2021, before the year-end adjustment to record bad debt expense,...

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Accounting

  1. At the end of year 2021, before the year-end adjustment to record bad debt expense, the ledger of Boilermaker Company included the following accounts and balances:

Allowance for doubtful accounts $15,000

Bad debt expense 0

Accounts Receivable 200,000 During 2021, cash collections on accounts receivable amounted to $350,000. Sales during 2021 amounted to $800,000, of which 70% was on credit, and it was estimated that 2.5% of the credit sales made in 2021 would ultimately become uncollectible. Please determine the balances of the allowance for doubtful accounts and bad debt expense after the adjustment to record bad debt expense was made. The allowance for doubtful accounts has a credit balance prior to the adjusting entry.

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