During 2012, Choi and Goldstein Furniture recorded credit sales of ($ 500,000). Based on prior experience, the

Question:

During 2012, Choi and Goldstein Furniture recorded credit sales of $\$ 500,000$. Based on prior experience, the company estimates that the bad debt rate is 2 percent of credit sales.

Required:

1. Prepare journal entries to record the following transactions:

a. The appropriate bad debt expense adjustment that was recorded for the year 2012.

b. On December 31,2012 , an account receivable for $\$ 1,600$ from a prior year was determined to be uncollectible and was written off.

2. Complete the following tabulation, indicating the amount and effect ( + for increase,- for decrease, and NE for no effect) of each transaction. image text in transcribed