On December $31,2023,$ Corotel Company$$s year$-$end, the unadjusted trial balance included the following items:

Account Debit Credit

Accounts receivable $ $2,100,000$

Allowance for doubtful accounts $33,000$

Sales $($$$3,030,000$ cash sales$)$ $ $11,400,000$

Required:

$1.$ Prepare the adjusting entry needed in Corotel$$s books to recognize bad debts under each of the following independent assumptions.

Bad debts are estimated to be $2\%$ of credit sales.

An analysis suggests that $5\%$ of outstanding accounts receivable on December $31,2023,$ will become uncollectible.On December $31,2023,$ Corotel Company$$s year$-$end, the unadjusted trial balance included the following items:

$2.$ Show how accounts receivable and the allowance for doubtful accounts would appear on the December $31,2023$ balance sheet given the facts in the requirement $1($a$)$ for assets especially the current assets.

Answer rating: 100% (QA)

Answer 1 Adjusting Entry for Bad Debts under Different Assumptions a Bad debts estimated to be 2 of ... View the full answer