Financial information for CNG Inc. follows: The company estimates bad debts for financial reporting purposes at 3
Question:
The company estimates bad debts for financial reporting purposes at 3 percent of credit sales. The balance
in allowance for doubtful accounts as of January 1, 2016, was $10,000.
REQUIRED:
a. Provide the journal entries related to allowance for doubtful accounts for 2016, 2017, and 2018.
b. Compute the balance in allowance for doubtful accounts as of December 31, 2018.
c. Comment on the sufficiency of the bad debt expense and allowance over the three-year period. How did you come to your conclusion?
2018 2016 2017 Credit sales Actual bad debt write-offs $205,000 $200,000 $180,000 6,000 11,000 10,000
Step by Step Answer:
a 2016 Allowance for Doubtful Accounts A 6000 Accounts Receivable A 6000 Wrote off accounts deemed uncollectible Bad Debt Expense E RE 5400 Allowance ...View the full answer
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