Question
Central Pacific Bank had credit sales of $987,575 during its 27th year of operations. At the end of the 27th year, $80,000 of credit sales
Central Pacific Bank had credit sales of $987,575 during its 27th year of operations. At the end of the 27th year, $80,000 of credit sales remained uncollected. Based on the experience of similar businesses, Central Pacific Bank estimated that $51,750 of its accounts receivable would be uncollectible. What is the journal entry under the allowance method and what is accounts receivable (net)?
- A. Dr. Bad debts expense 51,750; Cr. Accounts receivable 51,750 & accounts receivable (net) = 51,750
- B. Dr. Allowance for doubtful accounts 51,750; Bad debts expense Cr. 51,750 & accounts receivable (net) = 51,750
- C. Dr. Bad debts expense 51,750; Cr. Allowance for doubtful accounts 51,750 & accounts receivable (net) = 28,250
- D. None of the choices is correct.
- E. Dr. Allowance for doubtful accounts 51,750; Accounts receivable Cr. 51,750 & accounts receivable (net) = 28,250
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Intermediate Accounting
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield.
9th Canadian Edition, Volume 2
470964731, 978-0470964736, 978-0470161012
