Sonic Corp. runs the largest chain of drive-in restaurants in the United States. In its 2010 10

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Sonic Corp. runs the largest chain of drive-in restaurants in the United States. In its 2010 10 K, Sonic reported the following changes in the Allowance for Doubtful Accounts (in thousands):
Sonic Corp. runs the largest chain of drive-in restaurants in

Required:
1. Create a T-account for the Allowance for Doubtful Accounts and enter into it the amounts from the above schedule. Then write the T-account in equation format to prove that the above items account for the changes in the account.
2. Record summary journal entries related to (a) estimating bad debt expense, and (b) write offs of specific balances during the year.
3. If Sonic had written off an additional $20,000 of accounts receivable during the period, how would Net Receivables have been affected? How would Net Income have been affected?

Accounts Receivable
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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Related Book For  book-img-for-question

Fundamentals Of Financial Accounting

ISBN: 9780073527109

3rd Edition

Authors: Fred Phillips, Robert Libby, Patricia A Libby

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