The company had credit sales of $110,000 for the calendrer period 2021. Accounts receivable at the beginning
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Question:
The company had credit sales of $110,000 for the calendrer period 2021.
Accounts receivable at the beginning of the year was $25,000. $90,000 was collected during 2021.
The allowance for doubtful accounts totals at the beginning of the year was $1800.
$ 1500 of accounts receivable were written off during the year as uncollectible. Assuming:
- Required
- 1. The company estimates the allowance for bad debts to be 2% of credit sales, what is the year end adjusting entry?
- 2. Prepare the end of year 2021 accounts receivable and allowance for uncollectible accounts balances.
- 3. The company estimates that 10% of ending accounts receivables will not be collected, . What is the year-end adjusting entry to record the bad debt expense?
- 4. Prepare the end of year 2021 accounts receivable and allowance for uncollectible accounts balances.
- 5.Would your answer be different if the company utilized the direct write off method?
- If so, how? Record the accounting entry.
- 6. Prepare the end of year 2021 accounts receivable and allowance for uncollectible accounts balances
- 7. Which approach is correct?
Related Book For
Accounting
ISBN: 978-0324401844
22nd Edition
Authors: Carl S. Warren, James M. Reeve, Jonathan E. Duchac
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