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hi, i am having a hard time solving this problem 8.5B from the book Fundamental Accoutning Principles Volume 1. please help me solve it thank
hi, i am having a hard time solving this problem 8.5B from the book Fundamental Accoutning Principles Volume 1. please help me solve it thank you:)
Problem 8-5B Accounts receivable transactions and bad debt adjustments LO1, 2, 3 CHECK FIGURES: 2. Bad Debt Expense = $118,160: 5. Bad Debt Expense = $35.940 Wondra Supplies showed the following selected adjusted balances at its December 31, 2019, yearend: Accounts Receivable Dec. 31/19 Balance Allowance for Doubtful Accounts 12.300 Dec. 31/19 Balance 490,000 During 2020, the following selected transactions occurred: a. Sales totalled $1,800,000, of which 85% were credit sales (cost of sales $987,000). b. Sales returns were $31,000, all regarding credit sales. The returned merchandise was scrapped. c. An account for $29,000 was recovered. d. Several accounts were written oft, including one very large account: the total was $65,500. e. Collected accounts receivable of $1,630,000 (excluding the recovery in (e) above). Sales discounts of $22,000 were taken. Part A Required 1. Journalize transactions (a) through (e). You may find it useful to post your entries to T-accounts for Accounts Receivable and Allowance for Doubtful Accounts. 593 Part B Required 2. Prepare the December 31, 2020, adjusting entry to estimate bad debts, assuming uncollectible accounts are estimated to be 8% of net credit sales. 3. Show how accounts receivable will appear on the December 31, 2020, balance sheet. 4. What will bad debt expense be on the income statement for the year ended December 31, 2020? Part C (independent of Part B) Required 5. Prepare the December 31, 2020, adjusting entry to estimate bad debts, assuming uncollectible accounts are estimated to be 4% of outstanding receivables. 6. Show how accounts receivable will appear on the December 31, 2020, balance sheet. 7. What will bad debt expense be on the income statement for the year ended December 31, 2020 Step by Step Solution
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