Francesca and Sophia decide to extend credit to their customers in order to increase HHEC.coms sales. However,
Question:
Francesca and Sophia decide to extend credit to their customers in order to increase HHEC.com’s sales. However, they are unsure how to account for credit sales and what method they should use to account for customers who do not pay for their credit purchases. They provide you with a series of transactions involving the sale of merchandise on credit and ask you to record these transactions in the general journal. They then provide you with the projected balance of Accounts Receivable at the end of Year 3 and ask you to determine the amount of bad debt expense using the direct write-off and allowance methods.
Record the transactions involving sale of merchandise on credit. Determine the amount of bad debt expense using the direct write-off and allowance methods. Complete this task using the provided Excel spreadsheet.