The ledger of J.C. Cobb Company at the end of the current year shows Accounts Receivable ($
Question:
The ledger of J.C. Cobb Company at the end of the current year shows Accounts Receivable \(\$ 150,000\), Sales Revenue \(\$ 850,000\), and Sales Returns and Allowances \(\$ 30,000\).
Instructions
a. If J.C. Cobb uses the direct write-off method to account for uncollectible accounts, journalize the adjusting entry at December 31, assuming J.C. Cobb determines that M. Jack's \(\$ 1,500\) balance is uncollectible.
b. If Allowance for Doubtful Accounts has a credit balance of \(\$ 2,400\) in the trial balance, journalize the adjusting entry at December 31, assuming bad debts are expected to be \(10 \%\) of accounts receivable.
c. If Allowance for Doubtful Accounts has a debit balance of \(\$ 200\) in the trial balance, journalize the adjusting entry at December 31 , assuming bad debts are expected to be \(6 \%\) of accounts receivable.
Step by Step Answer:
Financial Accounting Tools For Business Decision Making
ISBN: 9781119791089
10th Edition
Authors: Paul D. Kimmel, Jerry J. Weygandt, Jill E. Mitchell