Farr Co. elects to use the percentage-of-sales basis in 2014 to record bad debt expense. It estimates that 2% of net credit sales will become uncollectible. Sales revenues are $800,000 for 2014, sales returns and allowances are $40,000, and the allowance for doubtful accounts has a credit balance of $9,000. Prepare the adjusting entry to record bad debt expense in 2014.
Answer to relevant QuestionsKingston Co. uses the percentage-of-receivables basis to record bad debt expense. It estimates that 1% of accounts receivable will become uncollectible. Accounts receivable are $420,000 at the end of the year, and the ...Gentry Wholesalers accepts from Benton Stores a $6,200, 4-month, 9% note dated May 31 in settlement of Benton’s overdue account. (a) What is the maturity date of the note? (b) What is the entry made by Gentry at the ...On December 31, 2014, Ling Co. estimated that 2% of its net sales of $450,000 will become uncollectible. The company recorded this amount as an addition to Allowance for Doubtful Accounts. On May 11, 2015, Ling Co. ...Kerwick Company had accounts receivable of $100,000 on January 1, 2014. The only transactions that affected accounts receivable during 2014 were net credit sales of $1,000,000, cash collections of $920,000, and accounts ...Information related to Miracle Company for 2014 is summarized below.Total credit sales $1,000,000Accounts receivable at December 31 369,000Bad debts written off 22,150Instructions(a) What amount of bad debt expense will ...
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