Question

At December 31, 2014, the trial balance of Sloane Company contained the following amounts before adjustment.



Instructions
(a) Prepare the adjusting entry at December 31, 2014, to record bad debt expense, assuming that the aging schedule indicates that $10,200 of accounts receivable will be uncollectible.
(b) Repeat part (a), assuming that instead of a credit balance there is a $1,500 debit balance in Allowance for Doubtful Accounts.
(c) During the next month, January 2015, a $2,100 account receivable is written off as uncollectible. Prepare the journal entry to record the write-off.
(d) Repeat part (c), assuming that Sloane Company uses the direct write-off method instead of the allowance method in accounting for uncollectible accounts receivable.
(e) What are the advantages of using the allowance method in accounting for uncollectible accounts as compared to the direct write-offmethod?


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  • CreatedApril 07, 2014
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