Uncollectible AccountsPercentage of Sales and Percentage of Receivables

At the completion of the current fiscal year ending December 31, the balance of Accounts Receivable for Yang's Gift Shop was $28,500. Credit sales for the year were $370,000.

Required:

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Make the necessary adjusting entry in general journal form under each of the following assumptions. Show the calculation for net realizable value.

1. Allowance for Doubtful Accounts has a credit balance of $330.

a. The percentage of sales method is used and bad debt expense is estimated to be 2% of credit sales.

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ROW NUMBER	DATE	ACCOUNT TITLE	DOC. NO.	POST. REF.	DEBIT	CREDIT	ROW NUMBER
1	20-- Dec. 31	Accounts ReceivableAllowance for Doubtful AccountsBad Debt ExpenseCashSalesBad Debt Expense	blank	blank	Bad Debt Expense	Bad Debt Expense	1
2	blank	Accounts ReceivableAllowance for Doubtful AccountsBad Debt ExpenseCashSalesAllowance for Doubtful Accounts	blank	blank	Allowance for Doubtful Accounts	Allowance for Doubtful Accounts	2
3	blank	blank	blank	blank	blank	blank	3

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Accounts receivable, December 31, 20--	$fill in the blank 6d4f82ffb03100d_1
Less allowance for doubtful accounts	fill in the blank 6d4f82ffb03100d_2
Net realizable value	$fill in the blank 6d4f82ffb03100d_3

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b. The percentage of receivables method is used and an analysis of the accounts produces an estimate of $7,000 in uncollectible accounts.

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ROW NUMBER	DATE	ACCOUNT TITLE	DOC. NO.	POST. REF.	DEBIT	CREDIT	ROW NUMBER
1	20-- Dec. 31	Accounts PayableAccounts ReceivableAllowance for Doubtful AccountsBad Debt ExpenseCash	blank	blank	- Select -	- Select -	1
2	blank	Accounts PayableAccounts ReceivableAllowance for Doubtful AccountsBad Debt ExpenseCash	blank	blank	- Select -	- Select -	2
3	blank	blank	blank	blank	blank	blank	3

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Accounts receivable, December 31, 20--	$
Net realizable value

2. Allowance for Doubtful Accounts has a debit balance of $420.

a. The percentage of sales method is used and bad debt expense is estimated to be 1.5% of credit sales.

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ROW NUMBER	DATE	ACCOUNT TITLE	DOC. NO.	POST. REF.	DEBIT	CREDIT	ROW NUMBER
1	20-- Dec. 31	Accounts ReceivableAllowance for Doubtful AccountsBad Debt ExpenseCashSales	blank	blank	- Select -	- Select -	1
2	blank	Accounts ReceivableAllowance for Doubtful AccountsBad Debt ExpenseCashSales	blank	blank	- Select -	- Select -	2
3	blank	blank	blank	blank	blank	blank	3

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Accounts receivable, December 31, 20--	$fill in the blank 6e0c7000201afb4_1
Less allowance for doubtful accounts	fill in the blank 6e0c7000201afb4_2
Net realizable value	$fill in the blank 6e0c7000201afb4_3

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b. The percentage of receivables method is used and an analysis of the accounts produces an estimate of $5,750 in uncollectible accounts.

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ROW NUMBER	DATE	ACCOUNT TITLE	DOC. NO.	POST. REF.	DEBIT	CREDIT	ROW NUMBER
1	20-- Dec. 31	Accounts PayableAccounts ReceivableAllowance for Doubtful AccountsBad Debt ExpenseCash	blank	blank	- Select -	- Select -	1
2	blank	Accounts PayableAccounts ReceivableAllowance for Doubtful AccountsBad Debt ExpenseCash		blank	- Select -	- Select -	2
3	blank	blank	blank	blank	blank	blank	3

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Accounts receivable, December 31, 20--	$fill in the blank 3c576ff77ff7054_1
Less allowance for doubtful accounts	fill in the blank 3c576ff77ff7054_2
Net realizable value	$fill in the blank 3c576ff77ff7054_3