Carlo Fassi Co. uses 8% of the accounts receivable balance to determine its allowance for bad debts
Question:
Carlo Fassi Co. uses 8\% of the accounts receivable balance to determine its allowance for bad debts for the period. At the beginning of the current period, Fassi had Allowance for Doubtful Accounts of \(\$ 10,000\) (credit). During the period, it had net credit sales of \(\$ 900,000\) and wrote off as uncollectible accounts receivable of \(\$ 6,000\). However, one of the accounts written off as uncollectible in the amount of \(\$ 3,000\) was recovered before the end of the current period. At the end of the period it had a balance in its accounts receivable account of \(\$ 225,000\).
\section*{Instructions}
(a) Prepare the entry to record bad debts expense for the current period.
(b) Prepare the entry to record the write-off of uncollectible accounts during the current period.
(c) Prepare the entries to record the recovery of the uncollectible accounts during the current period.
(d) Determine the ending balance in Allowance for Doubtful Accounts.
Step by Step Answer:
Financial Accounting Tools For Business Decision Making
ISBN: 9780471169192
1st Edition
Authors: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso