Given the information presented in Figure 13.13 , do the following:

Aging of Accounts Receivable for Masso Co.

1. Prepare on December 31, 2018, the adjusting journal entry for Bad Debts Expense. Balances: Cash, $32,000; Accounts Receivable, $152,000; Allowance for Doubtful Accounts, $260; Merchandise Inventory, $12,000. The company uses the allowance method and the balance sheet approach.

2. Prepare a partial balance sheet on December 31, 2018, showing how net realizable value is calculated.

3. If the balance in the Allowance for Doubtful Accounts were a $260 debit balance, journalize the adjusting entry for Bad Debts Expense on December 31, 2018.

Transcribed Image Text:

MASSO CO. DECEMBER 31, 2018 Estimated Percent Estimated Amount Needed Considered to Be Bad in Allowance for Amount Debts Expense Doubtful Accounts Not yet due $120,000 2% 0-60 11,000 4% 61-180 11,000 21% Over 6 months 10,000 30% $152,000