Problem 7-2B Estimating and reporting bad debts P2 P3 At December 31, 2017, Ingleton Company reports...

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Problem 7-2B Estimating and reporting bad debts P2 P3 At December 31, 2017, Ingleton Company reports the following results for the year: Cash sales Credit sales $1,025,000 1,342,000 In addition, its unadjusted trial balance includes the following items: Accounts receivable Allowance for doubtful accounts Required $575,000 debit 7,500 credit 1. Prepare the adjusting entry for Ingleton Co. to recognize bad debts under each of the following independent assumptions. a. Bad debts are estimated to be 2.5% of credit sales. b. Bad debts are estimated to be 1.5% of total sales. c. An aging analysis estimates that 6% of year-end accounts receivable are uncollectible. Check Dr. Bad Debts Expense: (1b) $35,505, (1c) $27,000 2. Show how Accounts Receivable and the Allowance for Doubtful Accounts appear on its December 31, 2017, balance sheet given the facts in part 1a. 3. Show how Accounts Receivable and the Allowance for Doubtful Accounts appear on its December 31, 2017, balance sheet given the facts in part 1c. General Journal Date Account and Description Page PR Debit Credit Problem 7-2B Estimating and reporting bad debts P2 P3 At December 31, 2017, Ingleton Company reports the following results for the year: Cash sales Credit sales $1,025,000 1,342,000 In addition, its unadjusted trial balance includes the following items: Accounts receivable Allowance for doubtful accounts Required $575,000 debit 7,500 credit 1. Prepare the adjusting entry for Ingleton Co. to recognize bad debts under each of the following independent assumptions. a. Bad debts are estimated to be 2.5% of credit sales. b. Bad debts are estimated to be 1.5% of total sales. c. An aging analysis estimates that 6% of year-end accounts receivable are uncollectible. Check Dr. Bad Debts Expense: (1b) $35,505, (1c) $27,000 2. Show how Accounts Receivable and the Allowance for Doubtful Accounts appear on its December 31, 2017, balance sheet given the facts in part 1a. 3. Show how Accounts Receivable and the Allowance for Doubtful Accounts appear on its December 31, 2017, balance sheet given the facts in part 1c. General Journal Date Account and Description Page PR Debit Credit