At the end of the current year, the accounts receivable account of Glenns Nursery Supplies has a
Question:
At the end of the current year, the accounts receivable account of Glenn’s Nursery Supplies has a debit balance of $390,000. Credit sales are $2,800,000. Record the end-of-period adjusting entry on December 31, in general journal form, for the estimated uncollectible accounts. Assume the following independent conditions existed prior to the adjustment:
1. Allowance for Bad Debts has a credit balance of $1,760.
(a) The percentage of sales method is used and bad debt expense is estimated to be 1% of credit sales.
(b) The percentage of receivables method is used and an analysis of the accounts produces an estimate of $30,330 in uncollectible accounts.
2. Allowance for Bad Debts has a debit balance of $1,900.
(a) The percentage of sales method is used and bad debt expense is estimated to be ¾ of 1% of credit sales.
(b) The percentage of receivables method is used and an analysis of the accounts produces an estimate of $29,890 in uncollectible accounts.
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that...
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