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Question 2 The following account balances were found for Selling Corp. at the beginning of its fiscal year, January 1, 2019: Accounts Receivable $1,003,750 Allowance
Question 2 The following account balances were found for Selling Corp. at the beginning of its fiscal year, January 1, 2019: Accounts Receivable $1,003,750 Allowance for Doubtful Accounts 79,200 Sales for the year were $9,100,000, of which 70% was on credit, and sales returns were $190,000. Cash collections were $5,916,000. Selling's collection department had also written off specific accounts, $49,500 in total, of which 10% was later recovered and collected. The company's credit and collection manager has estimated that 5% of outstanding accounts receivable are uncollectible. Required: (1) Calculate the bad debt expense for the year assuming that the company uses the % of receivables approach. Show calculations. (2) Record all the journal entries for 2019 for which information is available. (3) Record the adjusting journal entry for bad debt expense assuming that the company used the direct write-off' approach
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