Question
Cranford Company's accounting records on December 31, 2016 provide the following information (prior to adjustment): Cash Sales $ 94,000 Net Credit Sales 260,00 Total Sales
Cranford Company's accounting records on December 31, 2016 provide the following information (prior to adjustment):
Cash Sales $ 94,000
Net Credit Sales 260,00
Total Sales (net) $354,000
Accounts Receivable 126,000
Allowance for doubtful accounts 2,100 (credit)
1. Prepare the journal entries to record the estimate of Cranford's bad debt expense for 2016 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. Explain why the entries are what they are.
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Fundamental accounting principle
Authors: John J. Wild, Ken W. Shaw, Barbara Chiappetta
21st edition
1259119831, 9781259311703, 978-1259119835, 1259311708, 978-0078025587
