Question
Below are PruCos entries to two accounts for the year. a. What do the debits to the Allowance account represent? Show the three journal entries
Below are PruCos entries to two accounts for the year.
a. What do the debits to the Allowance account represent? Show the three journal entries that led to the three debits in the Allowance account.
b. Pruco uses the percentage of credit sales method. If it estimates that 2% of its $250,000 in credit sales will not be collected, what adjusting entry does PruCo record to recognize bad debt expense for the year?
c. Now assume that Pruco uses the percentage of accounts receivable method. If it estimates that $4,000 of its receivables will not be collectable, what adjusting entry does PruCo record to recognize bad debt expense for the year?
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Financial Accounting Tools for business decision making
Authors: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso
6th Edition
978-1119191674, 047053477X, 111919167X, 978-0470534779
