During 2001, a corporation recorded sales as follows: Cash sales, $300,000, and credit sales, $150,000. At...

 

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During 2001, a corporation recorded sales as follows: Cash sales, $300,000, and credit sales, $150,000. At 12/31/01, before the adiusting entries, Accounts receivable showed a debit balance of $90,000 and Allowance for Doubtful Accounts showed a credit balance of $600. Required: (a) Assuming a bad debt of $150 is to be written off, give the journal entry on 12/31/01. (b) Give the adjusting entry for bad debt expense at 12/31/01, assuming bad debt losses are estimated to be 1 percent of credit sales. C) Give the adjusting entry for bad debt expense at 12/31/01, assuming instead that bad debt losses are estimated to be 2 percent of the balance in the Accounts receivable account (take transaction (a) into account). During 2001, a corporation recorded sales as follows: Cash sales, $300,000, and credit sales, $150,000. At 12/31/01, before the adiusting entries, Accounts receivable showed a debit balance of $90,000 and Allowance for Doubtful Accounts showed a credit balance of $600. Required: (a) Assuming a bad debt of $150 is to be written off, give the journal entry on 12/31/01. (b) Give the adjusting entry for bad debt expense at 12/31/01, assuming bad debt losses are estimated to be 1 percent of credit sales. C) Give the adjusting entry for bad debt expense at 12/31/01, assuming instead that bad debt losses are estimated to be 2 percent of the balance in the Accounts receivable account (take transaction (a) into account).

Answer rating: 100% (QA)

Solution Journal Entries S No Particulars Debit Credit a Allowance for doubtful acc... View the full answer