Exercise 7-9 Estimating bad debts LO P2

At December 31, Folgeys Coffee Company reports the following results for its calendar year.

Cash sales	$	900,000
Credit sales		300,000

Its year-end unadjusted trial balance includes the following items.

Accounts receivable	$	125,000	debit
Allowance for doubtful accounts		5,000	debit

a.

Prepare the adjusting entry to record Bad Debts Expense assuming uncollectibles are estimated to be 3% of credit sales.

B. Prepare the adjusting entry to record Bad Debts Expense assuming uncollectibles are estimated to be 1% of total sales.

c.	Prepare the adjusting entry to record Bad Debts Expense assuming uncollectibles are estimated to be 6% of year-end accounts receivable