E7-7:

Prepare the necessary journal entries for Perez Computers.

5 E7-7 (Recording Bad Debts) Duncan Company reports the following financial information before adjustments.

Instructions

Accounts Receivable Allowance for Doubtful Accounts Sales Revenue (all on credit) Sales Returns and Allowances

$100,000

50,000

$ 2,000 900,000

Prepare the journal entry to record Bad Debt Expense assuming Duncan Company estimates bad debts at (a) 1% of net sales and (b) 5% of accounts receivable