Tanning Company Analyzes Its Receivables to Estimate Bad Debt Expense $\quad 17,000$

Short Answer

Tanning Company analyzes its receivables to estimate bad debt expense. The accounts receivable balance is $390,000 and credit sales are $1,300,000. An aging of accounts receivable shows that approximately 5% of the outstanding receivables will be uncollectible. What adjusting entry will Tanning Company make if Allowance for Doubtful Accounts has a credit balance of $2,500 before adjustment? a. Bad Debt Expense $\quad 17,000$
Allowance for Doubtful Accounts $\quad 17,000$
b. Bad Debt Expense $\quad 19,500$
Allowance for Doubtful Accounts $\quad 19,500$
c. Bad Debt Expense $~~~~$ 22,000
Allowance for Doubtful Accounts $\quad 22,000$
d. Bad Debt Expense $~~~~~$ 65,000
Allowance for Doubtful Accounts $\quad 65,000$