Exercise 8-05

The ledger of Marin Inc. at the end of the current year shows Accounts Receivable $86,000; Credit Sales $800,000; and Sales Returns and Allowances $44,000.

(a)		If Marin uses the direct write-off method to account for uncollectible accounts, journalize the adjusting entry at December 31, assuming Marin determines that Matisses $700 balance is uncollectible.
(b)		If Allowance for Doubtful Accounts has a credit balance of $1,300 in the trial balance, journalize the adjusting entry at December 31, assuming bad debts are expected to be 10% of accounts receivable.
(c)		If Allowance for Doubtful Accounts has a debit balance of $450 in the trial balance, journalize the adjusting entry at December 31, assuming bad debts are expected to be 8% of accounts receivable.

Prepare journal entries to record the above transactions. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

No.	Date	Account Titles and Explanation	Debit	Credit
(a)	Dec. 31	enter an account title to record the first transaction	enter a debit amount	enter a credit amount
		enter an account title to record the first transaction	enter a debit amount	enter a credit amount
(b)	Dec. 31	enter an account title to record the second transaction	enter a debit amount	enter a credit amount
		enter an account title to record the second transaction	enter a debit amount	enter a credit amount
(c)	Dec. 31	enter an account title to record the third transaction	enter a debit amount	enter a credit amount
		enter an account title to record the third transaction	enter a debit amount	enter a credit amount

Exercise 8-06 a-b

Crane Company has accounts receivable of $98,600 at March 31, 2022. Credit terms are 2/10, n/30. At March 31, 2022, there is a $2,227 credit balance in Allowance for Doubtful Accounts prior to adjustment. The company uses the percentage-of-receivables basis for estimating uncollectible accounts. The companys estimates of bad debts are as shown below.

		Balance, March 31				Estimated Percentage Uncollectible
Age of Accounts		2022		2021
Current		$68,400		$69,990		2	%
130 days past due		13,700		7,880		5
3190 days past due		9,700		2,400		28
Over 90 days past due		6,800		1,100		49
		$98,600		$81,370

Determine the total estimated uncollectibles at March 31, 2022.

Total estimated uncollectibles

$Enter a dollar amount

Prepare the adjusting entry at March 31, 2022, to record bad debt expense. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Account Titles and Explanation	Debit	Credit
Enter an account title	Enter a debit amount	Enter a credit amount
Enter an account title	Enter a debit amount	Enter a credit amount