Given the information presented in Figure 13.12, do the following:

a. Prepare on December 31, 2021, the adjusting journal entry for Bad Debts Expense. Balances: Cash, $28,000; Accounts Receivable, $171,000; Allowance for Doubtful Accounts, $340; Merchandise Inventory, $18,000. The company uses the allowance method and the balance sheet approach.

b. Prepare a partial balance sheet on December 31, 2021, showing how net realizable value is calculated.

c. If the balance in the Allowance for Doubtful Accounts were a $340 debit balance, journalize the adjusting entry for Bad Debts Expense on December 31, 2021.

Transcribed Image Text:

Not yet due 0-60 61-180 Over 6 months Amount $140,000 11,000 13,000 7,000 $171,000 MASSE CO. DECEMBER 31, 2021 Estimated Percent Considered to Be Bad Debts Expense 7% 9% 18% 30% Estimated Amount Needed in Allowance for Doubtful Accounts