Kandel Company had the following data available for 2014 (before making any adjustments): Accounts receivable, 12/31/14 .
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Question:
Kandel Company had the following data available for 2014 (before making any adjustments):
Accounts receivable, 12/31/14 ……………………………. $320,100 (Dr.)
Allowance for doubtful accounts ………………………….. 2,600 (Cr.)
Net credit sales, 2014 ……………………………………… 834,000 (CL)
Required
1. Prepare the journal entry to recognize bad debts under the following assumptions:
(a) Bad debts expense is expected to be 2% of net credit sales for the year and
(b) Kandel expects it will not be able to collect 6% of the balance in accounts receivable at year—end.
2. Assume instead that the balance in the allowance account is a $2,600 debit How will this affect your answers to part (1)?
Related Book For
Financial Accounting The Impact on Decision Makers
ISBN: 978-1285182964
9th edition
Authors: Gary A. Porter, Curtis L. Norton
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