Kandel Company had the following data available for 2016 (before making any adjustments): Accounts receivable, 12/31/16 ............................
Question:
Accounts receivable, 12/31/16 ............................ $320,100 (Dr.)
Allowance for doubtful accounts ................................. 2,600 (Cr.)
Net credit sales, 2016 ................................................ 834,000 (Cr.)
Required
1. Prepare the journal entry to recognize bad debts under the following assumptions:
(a) Bad debts expense is expected to be 2% of net credit sales for the year and
(b) Kandel expects it will not be able to collect 6% of the balance in accounts receivable at year-end.
2. Assume instead that the balance in the allowance account is a $2,600 debit. How will this affect your answers to part (1)?
Accounts Receivable
Accounts 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...
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Related Book For
Financial Accounting The Impact On Decision Makers
ISBN: 9781305793194
10th Edition
Authors: Gary A. Porter, Curtis L. Norton
Question Posted: