Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Innovative Tech Incorporated (IT) has been using the percentage of credit sales method to estimate bad debts During November, II sold services on account for

image text in transcribed
Innovative Tech Incorporated (IT) has been using the percentage of credit sales method to estimate bad debts During November, II sold services on account for $100,000 and estimated that 1/2 of 1 percent of those sales would be uncollectible. Required: 1. Prepare the November adjusting entry for bad debts 2. Starting in December, IT/ switched to using the aging method. At its December 31 year-end, total Accounts Receivable is $89,000. aged as follows. (1) 1 to 30 days old, $75,000; (2) 31 to 90 days old, $10,000; and (3) more than 90 days old, $4,000. The overage rate of uncollectibility for each age group is estimated to be (i) 10 percent, (2) 20 percent, and (3) 40 percent, respectively. Prepare a schedule to estimate an appropriate year-end balance for the Allowance for Doubtful Accounts. 3. Before the end-of-year adjusting entry is made, the Allowance for Doubtful Accounts has a $1,600 credit bolance ot December 31. Prepare the December 31 adjusting entry. 4. Show how the various accounts related to accounts recelvable should be shown on the December 31 balance sheet: Complete this question by entering your answers in the tabs below. Prepare the November adjusting entry for bad debts, (If no entry is required for a transactionvevent, select "No Joumal Entry Required" in the first account field.)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Horngrens Cost Accounting A Managerial Emphasis

Authors: Srikant Datar, Madhav Rajan

16th Global Edition

1292211547, 9781292211541

More Books

Students also viewed these Accounting questions

Question

=+9 Which depend on individual style more than anything else?

Answered: 1 week ago

Question

Discuss how technology impacts HRD evaluation

Answered: 1 week ago