Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Nguyen & Evans Incorporated, is a software development company that recently reported the following amounts (in thousands) in its unadjusted trial balance as of

image text in transcribed

Nguyen & Evans Incorporated, is a software development company that recently reported the following amounts (in thousands) in its unadjusted trial balance as of February 28, 2019. Debita Credits Accounts Receivable Allowance for Doubtful Accounts Sales and Service Revenue Required: $ 989,250 $ 5,400 5,100,000 1. Assume Nguyen & Evans uses 4 of 1 percent of revenue to estimate its bad debt expense for the year. Prepare the adjusting journal entry required at February 28 for recording Bad Debt Expense. 2. Assume instead that Nguyen & Evans uses the aging of accounts receivable method and estimates that $6,800 (thousand) of Accounts Receivable will be uncollectible. Prepare the adjusting journal entry required at February 28 for recording bad debt expense. TIP. The aging of accounts receivable method focuses on calculating what the adjusted Allowance for Doubtful Accounts balance should be. You need to consider the existing balance when determining the adjustment. 3. Assume that the unadjusted balance in Nguyen & Evans's Allowance for Doubtful Accounts at February 28 was a debit balance of $1,360 (thousand). Nguyen & Evans uses the aging of accounts receivable method and estimates that $6,800 (thousand) of Accounts Receivable will be uncollectible. Prepare the adjusting journal entry required at February 28 for recording bad debt expense. 4. If one of Nguyen & Evans's customers declared bankruptcy, what journal entry would be used to write off its $680 (thousand) balance? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Assume Nguyen & Evans uses % of 1 percent of revenue to estimate its bad debt expense for the year. Prepare the adjusting journal entry required at February 28 for recording Bad Debt Expense. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field. Enter your answers in whole dollars, rather than in thousands of dollars (e.g. $4 would be entered as $4,000).) View transaction list

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

Managerial Accounting Decision Making and Motivating Performance

Authors: Srikant M. Datar, Madhav V. Rajan

1st edition

132816245, 9780132816243, 978-0137024872

More Books

Students also viewed these Accounting questions