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The Allowance for Bad Debts Account Has a Credit Balance

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The Allowance for Bad Debts account has a credit balance of $2,000 before the adjusting entry for bad debts expense.The company's management estimates that 2% of net credit sales will be uncollectible for the year 2019.Net credit sales for the year were $250,000.Prepare the journal entry to record the bad debts expense on December 31,2019.Omit explanation.


Definitions:

Direct Labor Hours

The accumulated hours that employees dedicated to the manufacturing process or service provision have worked.

Fabrication Department

A specialized sector within manufacturing focusing on the construction and assembly of product parts or components.

Assembly Department

A section of a manufacturing facility where components are put together to form a finished product.

Single Plantwide Factory Overhead Rate

A single rate used to allocate factory overhead costs to products, calculated by dividing total overhead costs by a base, usually total direct labor hours or machine hours.

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