Ruygrok Corp. ( Ruygrok ) is primarily a wholesaler of kitchenware products but also sells the items
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Question:
Ruygrok Corp. Ruygrok is primarily a wholesaler of kitchenware products but also sells the items on a retail basis to consumers through a small shop in commercial clients, which represent of its business, are made on day trade terms. The remaining are sold for cash from its onpremises retail For the first three quarters of the year, Ruygrok estimates its allowance for doubtful accounts ADA at of credit sales. At yearend, Ruygrok uses the required ADA that it reports on its balance sheet.
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Required
a Record the journal entry to record the estimate of bad debt expense for the quarter ending March
b Prepare a summary journal entry to record the writing off of the bad debts during the year.
c Prepare summary journal entries to record the recovery of bad debts previously written off.
d Record the journal entry to record the estimate of bad debt expense for the yearended December
e Ruygrok currently estimates its bad debt expense for its first three quarters at of credit sales. Was this a reasonable proxy for its bad debt expense for the year, or should Ruygrok adjust it Why or why not?
Related Book For
Financial Reporting Financial Statement Analysis and Valuation a strategic perspective
ISBN: 978-1337614689
9th edition
Authors: James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
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