Question
At December 31, 2011, Ethan Company reports the following results for its calendar-year. Cash sales$2,195,910 Credit sales 2,987,000 Accounts receivable$905,061 debit Allowance for doubtful accounts
At December 31, 2011, Ethan Company reports the following results for its calendar-year.
Cash sales$2,195,910 Credit sales 2,987,000
Accounts receivable$905,061 debit Allowance for doubtful accounts 21,430 debit
1. | Prepare the adjusting entry for this company to recognize bad debts under each of the following independent assumptions. (Round your intermediate calculations and and final answers to the nearest dollar amount. Omit the "$" sign in your response.) |
a. | Bad debts are estimated to be 3% of credit sales. |
b. | Bad debts are estimated to be 2% of total sales. |
c. | An aging analysis estimates that 6% of year-end accounts receivable are uncollectible. |
Adjusting entries (all dated December 31, 2011). |
General Journal | Debit | Credit | |||||||||||||||||||||||||||||||||||||||||
a. | (Click to select)Accounts payableCashOffice suppliesBad debts expenseSalaries expenseAccounts receivableRent expenseAllowance for doubtful accounts | ||||||||||||||||||||||||||||||||||||||||||
(Click to select)Accounts receivableOffice suppliesRent expenseSalaries expenseAccounts payableCashAllowance for doubtful accountsBad debts expense | |||||||||||||||||||||||||||||||||||||||||||
b. | (Click to select)CashOffice suppliesRent expenseAccounts receivableAccounts payableBad debts expenseSalaries expenseAllowance for doubtful accounts | ||||||||||||||||||||||||||||||||||||||||||
(Click to select)Accounts payableAllowance for doubtful accountsAccounts receivableCashOffice suppliesSalaries expenseBad debts expenseRent expense | |||||||||||||||||||||||||||||||||||||||||||
c. | (Click to select)Accounts receivableCashRent expenseAccounts payableOffice suppliesAllowance for doubtful accountsSalaries expenseBad debts expense | ||||||||||||||||||||||||||||||||||||||||||
(Click to select)Office suppliesRent expenseBad debts expenseCashAllowance for doubtful accountsSalaries expenseAccounts receivableAccounts payable | |||||||||||||||||||||||||||||||||||||||||||
|
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started