2. Rose Company uses the Percentage of Accounts Receivable method to estimate the allowance for doubtful accounts. The balance in accounts receivable as of December 31, 2022, is $700,000. Rose estimates 5% uncollectible. In 2023 Rose writes off $40,000 in accounts receivable which were outstanding on December 31, 2022. The balance in accounts receivable as of December 31, 2023, is $900,000. Rose estimates 5% uncollectible. Required: Prepare the appropriate journal entries and post them to the ledger
Bad Debts
At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
![2. Rose Company uses the Percentage of Accounts Receivable method to estimate the
allowance for doubtful accounts. The balance in accounts receivable as of December 31,
2022, is $700,000. Rose estimates 5% uncollectible. In 2023 Rose writes off $40,000
in accounts receivable which were outstanding on December 31, 2022. The balance in
accounts receivable as of December 31, 2023, is $900,000. Rose estimates 5%
uncollectible.
Required: Prepare the appropriate journal entries and post them to the ledger
3. Violet Corporation uses the Percentage of Credit Sales Method to estimate uncollectible
accounts receivable. Credit sales for 2022 are $3,000,000. Violet estimates 10%
uncollectible. In 2023 Violet writes off $350,000 in accounts receivable which were
outstanding on December 31, 2022. The credit sales for 2021 are $4,000,000 and Violet
estimates 10% uncollectible.
Required: Prepare the appropriate journal entries and post them to the ledger](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F9065d5e0-e604-42ae-a5e0-4ab04a2a361f%2F4e0a2f94-27a8-4ff0-80cb-906fc5fdf57a%2Fczh3k3l_processed.jpeg&w=3840&q=75)
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