Question
Directions: Using the following information journalize the adjusting entries for the Allowance of Doubtful Accounts and Bad Debt Expense, write off the uncollectible accounts, and
Directions: Using the following information journalize the adjusting entries for the Allowance of Doubtful Accounts and Bad Debt Expense, write off the uncollectible accounts, and lastly prepare the entries required to collect on an account that had been written off.
Accounts Receivable $385,000
Sales $950,000
Allowance for Doubtful Accts. $2,000
Prepare the adjusting entry for bad debts expense under each of the independent assumptions.
a) An aging schedule indicates that $11,750 of accounts receivable will be uncollectible, there is a credit balance in the Allowance for Doubtful Accounts of $2,000.
b) The company estimates that 1% of sales will be uncollectible.
c) An aging schedule indicates that $11,750 of accounts receivable will be uncollectible, there is a debit balance in the Allowance for Doubtful Accounts of $2,000.
d) The company decides that $3,000 of its accounts receivable should be written off.
e) Of the previously written off accounts the company has collected $1,500 (prepare the entries required to put the accounts receivable back on the books and collect the cash)
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