Question: The following financial information pertains to Sleepy Company Required a Prepare all

The following financial information pertains to Sleepy Company:
Required
a. Prepare all the necessary journal entries for 2012 sales, collections, and write-offs (using the direct write-off method).
b. Using the allowance method, prepare 2012 journal entries to record write-offs and to estimate bad debt expense assuming bad debt expense is estimated on a (i) percentage of net credit sales approach (2%) and (ii) percentage of accounts receivable approach (5%).
c. What is the net realizable value of accounts receivable in parts b(i) and b(ii)?
d. Explain the rationale for each of the approaches in part b.



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  • CreatedJuly 16, 2015
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