Bramble Corp. uses the percentage of receivables method for recording bad debts expense. The accounts receivable balance is $220000 and credit sales are $2210000. Management estimates that 5% of accounts receivable will be uncollectible. What adjusting entry will Bramble Corp. make if the Allowance for Doubtful Accounts has a credit balance of $4400 before adjustment

the adjusting entry:

Dr Bad debt expense 6,600

    Cr Allowance for doubtful accounts 6,600

Explanation:

accounts receivable balance = $220,000

total credit sales = $2,210,000

estimated uncollectible accounts = $220,000 x 5% = $11,000

allowance for doubtful accounts = $4,400 credit balance

bad debt expense = $11,000 - $4,400 = $6,600

Allowance for doubtful accounts is a contra asset account that reduces the carrying value of accounts receivable account, that is why its normal balance should be a credit balance.

answer; (b) insider trading;

you will have $2593.74 in 10 years if you set aside $1,000 at 10%

you will have $9321.91 in 20 years if you set aside $2000 at 8%

you will have $1469.32 in 5 years if you set aside $1000 at 8%

you will have $1296.87 in 10 years if you set aside $500 at 10%

you will have $239.66 in 15 years if you set aside $100 at 6%

you will have $4660.96 in 20 years if you set aside $1000 at 8%