1. A company maintains an allowance for doubtful accounts related to its credit sales. For each credit sale, 1% is estimated to be uncollectible. A company recently made a credit sale of $50,000, and the cost of goods sold related to the transaction was $40,000. What journal entries should be made related to this sale? 2. A company estimates its future warranty obligations at the time a sale is made. This estimate is 2% of sales. The company recently sold $100,000 in a cash sale that had an associated cost of goods sold of $70,000. What journal entries should be made related to this sale?

1. A company maintains an allowance for doubtful accounts related to its credit sales. For each credit sale, 1% is estimated to be uncollectible. A company recently made a credit sale of $50,000, and the cost of goods sold related to the transaction was $40,000. What journal entries should be made related to this sale? 2. A company estimates its future warranty obligations at the time a sale is made. This estimate is 2% of sales. The company recently sold $100,000 in a cash sale that had an associated cost of goods sold of $70,000. What journal entries should be made related to this sale?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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