El Mona pic reports the following financial information before adjustments. Debit 70,000 Accounts receivable Allowance for...
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El Mona pic reports the following financial information before adjustments. Debit €70,000 Accounts receivable Allowance for doubtful accounts Sales Sales returns and allowances 6,000 Credit 1500 €400,000 Required 1) Prepare the journal entry to record Bad Debt Expense assuming Duncan Company estimates bad debts at 5% of accounts receivable. [2 mark] 2) Assume that all the information above is the same, except that the Allowance for Doubtful Accounts has a debit balance of €2,500 instead of a credit balance. How will this difference affect the journal entries in part (a)? Show your calculations. [2 mark] El Mona pic reports the following financial information before adjustments. Debit €70,000 Accounts receivable Allowance for doubtful accounts Sales Sales returns and allowances 6,000 Credit 1500 €400,000 Required 1) Prepare the journal entry to record Bad Debt Expense assuming Duncan Company estimates bad debts at 5% of accounts receivable. [2 mark] 2) Assume that all the information above is the same, except that the Allowance for Doubtful Accounts has a debit balance of €2,500 instead of a credit balance. How will this difference affect the journal entries in part (a)? Show your calculations. [2 mark]
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Related Book For
Financial and Managerial Accounting the basis for business decisions
ISBN: 978-0078111044
16th edition
Authors: Jan Williams, Susan Haka, Mark Bettner, Joseph Carcello
Posted Date:
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