Application Question # 6 Elmer Fudd Company uses the allowance method to account for bad debts. In the first year of operations (2019), Fudd sold $840,000 of merchandise on credit: which included a $1.500 sale to Foghorn Leghorn. On December 31, 2019, it provided an addition to its allowance for doubtful accounts equal to 1.5% of its credit sales. On June 1, 2020. Fudd wrote off as uncollectible the $1,500 account of Foghorn Leghorn, and on December 25, 2020 Foghorn Leghorn unexpectedly paid his account in full. On the Bad Debt working paper prepare the journal entries that Elmer Fudd Company should make: (a) On December 31, 2019. to increase the allowance for doubtful accounts. (b) On June 1, 2020, to write off the bad debt. (c) On December 25, 2020, to record the unexpected collection from Foghorn Leghorn. Next Previous Not saved Submit