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In 20X1, WynneCorp had total sales of $390,000, of which 82% were on credit. During the year, $300,000 cash was collected on credit sales. The
In 20X1, WynneCorp had total sales of $390,000, of which 82% were on credit. During the year, $300,000 cash was collected on credit sales. The beginning balance in Accounts Receivable (on January 1 of Year 1) was $65,000. The beginning balance in the Allowance for Doubtful Accounts (on January 1 of Year 1) was $20,000. The amount of accounts written off as uncollectible during the year was $25,000. -- Management uses the percentage of credit sales method and estimates that 9% of credit sales will ultimately be uncollectible. Which ONE of the following is included in the summary journal entry necessary during the year to record the write off of the $25,000 in verified uncollectible accounts? DEBIT to Bad Debt Expense for $25,000 CREDIT to Bad Debt Expense for $25,000 DEBIT to Accounts Receivable for $25,000 CREDIT to Cash for $25,000 DEBIT to Cash for $25,000 DEBIT to Allowance for Doubtful Accounts for $25,000
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