Given the information presented in Figure 13.13, do the following:

a. Prepare on December 31, 2015, the adjusting journal entry for Bad Debts Expense. Balances: Cash, $25,000; Accounts Receivable, $173,000; Allowance for Doubtful Accounts, $300; Merchandise Inventory, $10,000.

b. Prepare a partial balance sheet on December 31, 2015, showing how net realizable value is calculated.

c. If the balance in the Allowance for Doubtful Accounts were a $300 debit balance, journalize the adjusting entry for Bad Debts Expense on December 31, 2015.

Transcribed Image Text:

HAPPY CO. DECEMBER 31, 2015 Est imated Percent Considered to Be Bad Debts Expense 396 996 18% З 6% Estimated Amount Needed in Allowance for Doubtful Accounts Amount Not yet due 0-60 61-180 $150,000 10,000 9,000 4,000 $173,000