Reference no: EM132461204

Question 1: What is the Bad Debt Expense Journal Entry from the following information:

The following information is extracted from Shelton Corporation's accounting records at the beginning of 2016:

Accounts Receivable                               $62,000

Allowance for Doubtful Accounts                  1,400 (credit)

During 2016, sales on credit amounted to $591,000, $559,600 was collected on outstanding receivables and $2,700 of receivables were written off as uncollectible. On December 31, 2016, Shelton estimates its bad debts to be 4% of the outstanding gross accounts receivable balance.

Required:

Problem 1. Prepare the journal entry necessary to record Shelton's estimate of bad debt expense for 2016.