At the completion of the current fiscal year ending December 31, the balance of Accounts Receivable for
Question:
At the completion of the current fiscal year ending December 31, the balance of Accounts Receivable for Anderson’s Greeting Cards was $180,000. Credit sales for the year were $1,950,000.
REQUIRED
Make the necessary adjusting entry in general journal form under each of the following assumptions. Show calculations for the amount of each adjustment and the resulting net realizable value.
1. Allowance for Bad Debts has a credit balance of $2,600.
(a) The percentage of sales method is used and bad debt expense is estimated to be 1.5% of credit sales.
(b) The percentage of receivables method is used and an analysis of the accounts produces an estimate of $30,250 in uncollectible accounts.
2. Allowance for Bad Debts has a debit balance of $1,900.
(a) The percentage of sales method is used and bad debt expense is estimated to be 1.0% of credit sales.
(b) The percentage of receivables method is used and an analysis of the accounts produces an estimate of $20,500 in uncollectible accounts.
Accounts ReceivableAccounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that...
Step by Step Answer:
1 a b 2 a b DATE DESCRIPTION 20 Dec 31 Bad Debt Expens...View the full answer
