Question 6.1 (Total: 20 marks; -2 marks per error)

PEI Potato Corporations unadjusted trial balance included the following accounts:

Accounts	Debit	Credit
Accounts Receivable	$140,000
Allowance for Doubtful Accounts		$890
Sales		$425,000
Sales Returns and Allowances	10,000

Required

Prepare adjusting journal entries a

Unit 6 Study Exercises

Question 6.1 (Total: 20 marks; -2 marks per error)

PEI Potato Corporations unadjusted trial balance included the following accounts:

Accounts	Debit	Credit
Accounts Receivable	$140,000
Allowance for Doubtful Accounts		$890
Sales		$425,000
Sales Returns and Allowances	10,000

Required

Prepare adjusting journal entries assuming that the estimate of uncollectibles is determined by using

1. 4% of gross accounts receivable, and

2. 1.5% of net sales

ssuming that the estimate of uncollectibles is determined by using

1. 4% of gross accounts receivable, and

2. 1.5% of net sales