Question
At the end of the year, the company reported: Total sales of $425,000 of which $125,000 were cash sales. Accounts receivable balance is $40,000. Allowance
At the end of the year, the company reported: Total sales of $425,000 of which $125,000 were cash sales. Accounts receivable balance is $40,000. Allowance for Doubtful Accounts had a beginning credit balance of $5,500, and $4,300 were written off during the year.
a. What is the balance in Allowance for Doubtful Accounts at the end of the year before adjusting entry?
b. What is the adjusting journal entry if bad debts are estimated to be 4% of Accounts Receivable?
c. What is the adjusting journal entry if bad debts are estimated to be 5% of credit sales?
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