Question
Use the following information from The Pot Shop's Restaurant Supplies to answer the homework questions. Round all answers to the nearest whole dollar. Note that
Use the following information from The Pot Shop's Restaurant Supplies to answer the homework questions. Round all answers to the nearest whole dollar. Note that not all of the information may be required for every question.
| Current | 1-90 | 91-180 | 181-360 | 361+ | Total |
|---|---|---|---|---|---|
| 155,000 | 120,000 | 87,000 | 66,000 | 12,000 | 440,000 |
The Pot Shop had total sales of $160,000 for the month of September
As of August 31, The Pot Shop had a credit balance of $2,000 in their Allowance for Doubtful Accounts.
The Pot Shop uses the Percent of Sales method for estimating bad debt. They reserve at a rate of 0.5%.
What should be the balance in the reserve account as of the end of September?
Does The Pot Shop need to increase or decrease the reserve?
By how much does The Pot Shop need to adjust the reserve?
What is the journal entry to adjust the reserve?
DR:
CR:
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Fundamental Accounting Principles
Authors: John J. Wild, Ken W. Shaw, Barbara Chiappetta
20th Edition
1259157148, 78110874, 9780077616212, 978-1259157141, 77616219, 978-0078110870
