Question 6: Allowance for Doubtful Accounts

Snow Corporation sells all merchandise to customers on credit. Selected account balances at the year-end December 31, 2019 are as follows:

D . QUESTION 6 - ALLOWANCE FOR DOUBTEUL ACCOUNTS Snow Corporation sells all merchandise to customers on credit. Selected account balances at the year-end December 31, 2019 are as follows: DEBIT $375,000 CREDIT Accounts Receivable Credit Sales Allowance for Doubtful Accounts $531,000 10,800 Required: Answer each of the following independent questions. A) Assume the company estimates that 1.5% of all credit sates will not be collected. Prepare the proper journal entry on December 31, 2019 to recognize the Bad Debts Expense. Account PR Debit Credit B) What amount would be the balance in the Allowance for Doubtful Accounts after the above journal entry on December 31" 2019? 2. Assume the company estimates that 9% of its Accounts Receivable will never be collected. A) Prepare the proper journal entry to recognize the expense on December 31, 2019. Date Account PR Debit Credit es New. - 16 - BI UA E -- DE EE- 2 TERSEBUT B) What amount would be the balance in the Allowance for Doubtful Accounts after the above journal entry on December 31, 2019? 2. Assume the company estimates that 9% of its Accounts Recdivable will never be collected A) Prepare the proper journal entry to recognize the expense on December 31, 2019. Date Account P R Debit Credit Page 14 of 17 B) What amount would be the balance in the Allowance for Doubtful Accounts after the above journal entry on December 31, 2019