Bradford Companys accounting records on December 31, 2019, provide the following information (prior to adjustment):

Cash sales	$ 93,100
Net credit sales	263,600
Total sales (net)		$356,700
Accounts receivable		126,300
Allowance for doubtful accounts		2,350	(credit)

Required:

1.

Prepare the journal entries to record the estimate of Bradfords bad debt expense for 2019 assuming:

A.	Bad debts are estimated to be 2% of net credit sales.
B.	Bad debts are estimated to be 5% of gross accounts receivable.

2.

Next Level Discuss the advantages and disadvantages of the balance sheet and income statement approaches to estimating bad debt.

CHART OF ACCOUNTS

Bradford Company

General Ledger

	ASSETS
111	Cash
121	Accounts Receivable
122	Allowance for Doubtful Accounts
141	Inventory
152	Prepaid Insurance
181	Equipment
198	Accumulated Depreciation

	LIABILITIES
211	Accounts Payable
231	Salaries Payable
250	Unearned Revenue
261	Income Taxes Payable

	EQUITY
311	Common Stock
331	Retained Earnings

	REVENUE
411	Sales Revenue

	EXPENSES
500	Cost of Goods Sold
511	Insurance Expense
512	Utilities Expense
521	Salaries Expense
532	Bad Debt Expense
540	Interest Expense
541	Depreciation Expense
559	Miscellaneous Expenses
910	Income Tax Expense

X

General Journal

Shaded cells have feedback.

1a. Prepare the journal entries to record the estimate of Bradfords bad debt expense on December 31 assuming bad debts are estimated to be 2% of net credit sales.

General Journal Instructions

Question not attempted.

PAGE 1

GENERAL JOURNAL

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	DATE	ACCOUNT TITLE	POST. REF.	DEBIT	CREDIT
1
2

Points:

0 / 5

Feedback

Check My Work

When you are using the income statement approach, you should simply add the calculated adjustment to any existing balance in the allowance account.

1b. Prepare the journal entries to record the estimate of Bradfords bad debt expense on December 31 assuming bad debts are estimated to be 5% of gross accounts receivable.

General Journal Instructions

Question not attempted.

PAGE 1

GENERAL JOURNAL

Score: 0/25

	DATE	ACCOUNT TITLE	POST. REF.	DEBIT	CREDIT
1
2

1a. Prepare the journal entries to record the estimate of Bradfords bad debt expense on December 31 assuming bad debts are estimated to be 2% of net credit sales.

General Journal Instructions

Question not attempted.

PAGE 1

GENERAL JOURNAL

Score: 0/25

	DATE	ACCOUNT TITLE	POST. REF.	DEBIT	CREDIT
1
2

Points:

0 / 5

Feedback

Check My Work

When you are using the income statement approach, you should simply add the calculated adjustment to any existing balance in the allowance account.

1b. Prepare the journal entries to record the estimate of Bradfords bad debt expense on December 31 assuming bad debts are estimated to be 5% of gross accounts receivable.

General Journal Instructions

Question not attempted.

PAGE 1

GENERAL JOURNAL

Score: 0/25