Use the information presented in BE7.5 for Wilton, Inc.
Wilton, Inc. had net sales in 2020 of $1,400,000. At December 31, 2020, before adjusting entries, the balances in selected accounts were $250,000 debit, and Allowance for Doubtful Accounts $2,400 credit. If Wilton estimates that 8% of its receivables will prove to be uncollectible, prepare the December 31, 2020, journal entry to record bad debt expense.
a. Instead of an Allowance for Doubtful Accounts Balance of $2,400 credit, the balance was $1,900 debit. Assume that 10% of will prove to be uncollectible. Prepare the entry to record bad debt expense.
b. Instead of estimating uncollectibles based on a percentage of receivables, assume Wilton prepares an that estimates total uncollectible accounts at $24,600. (Assume an allowance of $2,400 credit.) Prepare the entry to record bad debt expense.
