Oriole Company uses the percentage-of-receivables basis to record bad debt expense and concludes that 2% of accounts receivable will become uncollectible. Accounts receivable are $391,900 at the end of the year, and the allowance for doubtful accounts has a credit balance of $2,903. (a) Prepare the adjusting journal entry to record bad debt expense for the year. (b) If the allowance for doubtful accounts had a debit balance of $827 instead of a credit balance of $2,903, prepare the adjusting journal entry for bad debt expense.

Answer and Explanation:

According to the scenario, journal entry for the given data are as follows:

a).  Journal entry to record bad-debt expense  

Bad-debt expense A/c [($391,900 × 2÷100) - $2,903]Dr.$4,935  

To Allowance for doubtful accounts A/c  $4,935

    (To record bad-debts expense)

b).  Journal entry to record bad-debt expense

Bad-debt expense A/c [($391900×2÷100)+$827 ] Dr.$8,665

To Allowance for doubtful accounts A/c$8,665

      (To record bad-debts expense)

the correct answer would be b, when, queen, calder hall and london.

explanation:

we always capitalize words when a paragraph or sentence is starting, when an important name is used, when a place is being written, or simply when a noun is used, etc. so in this sentence, sentence is starting from 'when', so it will be written in capital letters. secondly, queen is considered to be an important person, so it will also be written in capital letter. next, the name of the town is mentioned, i-e calder hall, which will also be written in capital letters. in the last,   city name is being used, 'london', which will also be written in capital letters. so option b is the most appropriate one.

i think the answer to your question is b. directive