Nash's Trading Post, LLC uses the percentage-of-receivables basis to record bad debt expense and concludes that 3% of accounts receivable will become uncollectible. Accounts receivable are $439,700 at the end of the year, and the allowance for doubtful accounts has a credit balance of $3,041. (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 $918 instead of a credit balance of $3,041, prepare the adjusting journal entry for bad debt expense.

Provision = $439700*3% = $13,191

Bad debts expense = $13,191 - $3,041 = $10150

Journal entries

       Particulars                                            Debit        Credit

a)    Bad debts expenses                      $10,150

            Allowance for doubtful accounts                  $10,150

      (To record Bad debt exp )  

b)     Bad debts expenses (13191+918)        $14,109

             Allowance for doubtful accounts                  $14,109

       (To record bad debts expenses)

income increases, enabling consumers to buy more goods and services. ( c.)

answer; /// (b) i believe its that is paid to state and federal taxing authorities;