Question
Clinton Company showed the following information at May 31, 2019 Account Debit credit Sales $20540 Account Receivable $ 8000 Allowance for doubtful A/C $260 Required:
Clinton Company showed the following information at May 31, 2019
| Account | Debit | credit |
| Sales | $20540 | |
| Account Receivable | $ 8000 | |
| Allowance for doubtful A/C | $260 |
Required:
1. Using the % of sales approach and assuming 3% of sales to estimate ADA
-
Calculate the estimated bad debt
-
Prepare the journal and T-accounts to adjust the ADA
-
Show the net realizable value of the A/C Receivable on a balance sheet extract.
2. Using the % of Account Receivable and assuming 10%
-
Calculate the estimated bad debt
-
Prepare the T-accounts and journal to adjust the ADA
-
Show the net realizable value of the A/C Receivable on a balance sheet extract.
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Financial Accounting an introduction to concepts, methods and uses
Authors: Clyde P. Stickney, Roman L. Weil, Katherine Schipper, Jennifer Francis
13th Edition
978-0538776080, 324651147, 538776080, 9780324651140, 978-0324789003
