Exercise 8-4

The ledger of Sheridan Company at the end of the current year shows Accounts Receivable $84,500; Credit Sales $756,230; and Sales Returns and Allowances $37,220.

(a)	If Sheridan Company uses the direct write-off method to account for uncollectible accounts, journalize the adjusting entry at December 31, assuming Sheridan Company determines that Matisses $893balance is uncollectible.
(b)	If Allowance for Doubtful Accounts has a credit balance of $1,107in the trial balance, journalize the adjusting entry at December 31, assuming bad debts are expected to be10% of accounts receivable.
(c)	If Allowance for Doubtful Accounts has a debit balance of $480in the trial balance, journalize the adjusting entry at December 31, assuming bad debts are expected to be8% 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)