Sunland Company uses the percentage-of-receivables method for recording bad debt expense. The Accounts Receivable balance is $310000 and credit sales are $1240000. Management estimates that 6% of accounts receivable will be uncollectible. What adjusting entry will Sunland Company make if the Allowance for Doubtful Accounts has a credit balance of $3100 before adjustment?

Answer: $15,500Explanation:First we calculate the estimated Uncollecteble debt,= 6% of 310,000= 0.06 (310,000)= $18,600We will then subtract the existing $3,100 to find out how much we will send to the Bad Debt Expense account because the amount already in the account needs to be included in the $18,600. = 18,600 - 3,100= $15,500We will therefore Debit the Bad Debt Expense account with $15,500 and Credit the Allowance for Doubtful Accounts with the same amount. If you need any clarification do react or comment.

Answer:Sunland CompanyThe Accounts Receivable balance is $310000 Credit sales are $1240000Bad debts 6% of accounts receivable= 6% of  $310000= $ 18600Allowance for Doubtful Accounts has a credit balance of $3100 Required Adjustment $ 15,500The following adjusting entry will be made.Journal Entry Date               Particulars                     Debit                     Credit                      Bad Debts Expense     15,500                     Allowance for Doubtful Debts                 15,500