Exercise 8-05

The ledger of Swifty Corporation at the end of the current year shows Accounts Receivable $105,000; Sales Revenue $837,000; and Sales Returns and Allowances $22,600.

(a)		If Swifty uses the direct write-off method to account for uncollectible accounts, journalize the adjusting entry at December 31, assuming Swifty determines that L. Doles $1,800 balance is uncollectible.
(b)		If Allowance for Doubtful Accounts has a credit balance of $2,100 in the trial balance, journalize the adjusting entry at December 31, assuming bad debts are expected to be 15% of accounts receivable.
(c)		If Allowance for Doubtful Accounts has a debit balance of $196 in the trial balance, journalize the adjusting entry at December 31, assuming bad debts are expected to be 10% of accounts receivable.

(Credit account titles are automatically indented when amount is entered. Do not indent manually.)

No.	Account Titles and Explanation	Debit	Credit
(a)
(b)
(c)