Question
The December 31, 2020 balance of Mohammad Com had Accounts Receivable of $400,000 and a credit balance in Allowance for Doubtful Accounts of $32,000. During
The December 31, 2020 balance of Mohammad Com had Accounts Receivable of $400,000 and a credit balance in Allowance for Doubtful Accounts of $32,000.
During 2021, the following transactions occurred:
a. sales on account $1,500,000;
b. sales return and allowances $50,000
c. collection from customers $1,250,000;
d. accounts written off $36,000;
e. previously written off accounts of $6,000 were collected.
Instructions:
1. Journalize the 2021 transaction
2. If the company uses percentage --of-sales basis to estimate bad debt expense and anticipates 3% of net sales to be uncollectable, what is the adjusting entry at December 31, 2021.
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