At December 31, 2018, Ingleton Company reports the following results for the year. In addition, its unadjusted

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At December 31, 2018, Ingleton Company reports the following results for the year.

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In addition, its unadjusted trial balance includes the following items.

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Required

1. Prepare the adjusting entry for Ingleton Co. to recognize bad debts under each of the following independent assumptions.

a. Bad debts are estimated to be 2.5% of credit sales.

b. Bad debts are estimated to be 1.5% of total sales.

c. An aging analysis estimates that 6% of year-end accounts receivable are uncollectible.

2. Show how Accounts Receivable and the Allowance for Doubtful Accounts appear on its December 31, 2018, balance sheet given the facts in part 1a.

3. Show how Accounts Receivable and the Allowance for Doubtful Accounts appear on its December 31, 2018, balance sheet given the facts in part 1c.

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...
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