Estimating and reporting bad debts

P2 P3

At December 31, Ingleton Company reports the following results for the year.

In addition, its unadjusted trial balance includes the following items.

Required

1.Prepare the adjusting entry to record bad debts under each separate assumption.

a.Bad debts are estimated to be 2.5% of credit sales.

b.Bad debts are estimated to be 1.5% of total sales.

c.An aging analysis estimates that 6% of year-end accounts receivable are uncollectible.

2.Show how Accounts Receivable and the Allowance for Doubtful Accounts appear on its December 31 balance sheet given the facts in part 1a.

3.Show how Accounts Receivable and the Allowance for Doubtful Accounts appear on its December 31 balance sheet given the facts in part 1c.

Check Dr. Bad Debts Expense: (1b) $35,505, (1c) $27,000

ACC 205 9-2B

Estimating and reporting bad debts P2 P3 At December 31 , Ingleton Company reports the following results for the year. In addition, its unadjusted trial balance includes the following items. Required 1. Prepare the adjusting entry to record bad debts under each separate assumption. a. Bad debts are estimated to be 2.5% of credit sales. b. Bad debts are estimated to be 1.5% of total sales. c. An aging analysis estimates that 6% of year-end accounts receivable are uncollectible. 2. Show how Accounts Receivable and the Allowance for Doubtful Accounts appear on its December 31 balance sheet given the facts in part 1 a. 3. Show how Accounts Receivable and the Allowance for Doubtful Accounts appear on its December 31 balance sheet given the facts in part 1 . Check Dr. Bad Debts Expense: (1b) $35,505, (1c) $27,000