Question: Topi Inc. uses the allowance method to estimate its bad debt expense. The company has accounts with the following balances at year end: Sales $475,000
Topi Inc. uses the allowance method to estimate its bad debt expense. The company has accounts with the following balances at year end:
| Sales | $475,000 |
| Accounts Receivable | $164,000 |
| Allowance for Doubtful Accounts | $2,000 credit |
If the company uses the percent of sales method to account for its bad debt expense and estimates bad debt expense to be 1% of total sales, what journal entry should the company make?
|
What effect does this entry have on the accounting equation?
| Assets | = | Liabilities | + | Equity |
| = | + |
HELP WOULD BE APPRECIATED
If the company uses the percent of accounts receivable method to account for its bad debt expense and estimates bad debt expense to be 5% of accounts receivable, what journal entry should the company make?
|
What effect does this entry have on the accounting equation?
| Assets | = | Liabilities | + | Equity |
| = | + |
If the company uses the aging of accounts receivable method to account for its bad debt expense and the aging schedule estimates that $7000 of accounts receivable will be uncollectible, what journal entry should the company make?
|
What effect does this entry have on the accounting equation?
| Assets | = | Liabilities | + | Equity |
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