Topi Inc. uses the allowance method to estimate its bad debt expense. The company has accounts with the following balances at year end:

Sales	$475,000
Accounts Receivable	$164,000
Allowance for Doubtful Accounts	$2,000 credit

If the company uses the percent of sales method to account for its bad debt expense and estimates bad debt expense to be 1% of total sales, what journal entry should the company make?

Dr

Cr

What effect does this entry have on the accounting equation?

Assets	=	Liabilities	+	Equity
	=		+

HELP WOULD BE APPRECIATED

If the company uses the percent of accounts receivable method to account for its bad debt expense and estimates bad debt expense to be 5% of accounts receivable, what journal entry should the company make?

Dr

Cr

What effect does this entry have on the accounting equation?

Assets	=	Liabilities	+	Equity
	=		+

If the company uses the aging of accounts receivable method to account for its bad debt expense and the aging schedule estimates that $7000 of accounts receivable will be uncollectible, what journal entry should the company make?

Dr

Cr

What effect does this entry have on the accounting equation?

Assets

=

Liabilities

+

Equity