Nicole’s Neckties has total credit sales for the year of
Question and Solution
Nicole’s Neckties has total credit sales for the year of $380,000 and estimates that 2% of its credit sales will be uncollectible. Record the end-of-period adjusting entry on December 31, in general journal form, for the estimated uncollectible accounts. Assume the following independent conditions existed prior to the adjustment: 1. Allowance for Bad Debts has a credit balance of $430. 2. Allowance for Bad Debts has a debit balance of $295.