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nat E9-2 The ledger of the Ott Company at the end of the current year shows Accounts Receivable $110,000, Sales $840,000, and Sales Returns and
nat E9-2 The ledger of the Ott Company at the end of the current year shows Accounts Receivable $110,000, Sales $840,000, and Sales Returns and Allowances $40,000. Instructions (a) If Allowance for Doubtful Accounts has a credit balance of $2,500 in the trial balance, jour- nalize the adjusting entry at December 31, assuming bad debts are estimated to be (1) 1% of net sales, and (2) 10% of accounts receivable. (b) If Allowance for Doubtful Accounts has a debit balance of $500 in the trial balance, journalize the adjusting entry at December 31, assuming bad debts are estimated to be (1) 0.5% of net sales, and (2) 5% of accounts receivable. F9-3
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