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At December 31 of the current year, a company reported the following: Total sales for the current year: $780,000, includes $160,000 in cash sales. Accounts
At December 31 of the current year, a company reported the following:
Total sales for the current year: $780,000, includes $160,000 in cash sales.
Accounts receivable balance at Dec. 31, current year: $190,000.
Bad debts written off during the current year: $6,800.
Balance in Bad Debts at beginning of year: $8,300
Please show solutions.
Prepare the necessary adjusting entries to record bad debts expense assuming this company's bad debts are estimated to equal:
a. 1.5% of credit sales.
b. 5% of accounts receivable.
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