The ledger of J.C. Cobb Company at the end of the current year shows Accounts Receivable

$150,000, Sales Revenue $850,000, and Sales Returns and Allowances $30,000.

Instructions

(a) If J.C. Cobb uses the direct write-off method to account for uncollectible accounts,

journalize the adjusting entry at December 31, assuming J.C. Cobb determines that

M. Jacks $1,500 balance is uncollectible.

(b) If Allowance for Doubtful Accounts has a credit balance of $2,400 in the trial balance,

journalize the adjusting entry at December 31, assuming bad debts are expected to be

(1) 1.5% of net sales, and (2) 10% of accounts receivable.