A trial balance before adjustment included the following: Credit Debit $1,640,000 Accounts receivable Allowance for doubtful accounts Sales Sales returns and allowances 19,200 $10,690,000 180,000 A) Give journal entries assuming that the estimate of uncollectibles is determined by taking (1) 6% of gross accounts receivable and (2) 1% of gross sales. B) Give journal entries assuming that the estimate of uncollectibles are the same as above but the Allowance for Doubtful Accounts has a Debit Balance of $15,400

A trial balance before adjustment included the following: Credit Debit $1,640,000 Accounts receivable Allowance for doubtful accounts Sales Sales returns and allowances 19,200 $10,690,000 180,000 A) Give journal entries assuming that the estimate of uncollectibles is determined by taking (1) 6% of gross accounts receivable and (2) 1% of gross sales. B) Give journal entries assuming that the estimate of uncollectibles are the same as above but the Allowance for Doubtful Accounts has a Debit Balance of $15,400

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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The allowance for uncollectible accounts currently has a credit balance of $200 the company's management estimates that 2.5% of net credit sales will be uncollectible net credit sales or 115, 000 what will be the balance of allowance for collectible accounts reported on the balance sheet once the adjustment is made assuming the percent of sales method is used
Assume Simple Company had credit sales of $243,000 and cost of goods sold of $143,000 for the period. Simple uses the percentage of credit sales method and estimates that 2 percent of credit sales would result in uncollectible accounts. Before the end-of-period adjustment is made, the Allowance for Doubtful Accounts has a credit balance of $180. Required: What amount of Bad Debt Expense would the company record as an end-of-period adjustment?
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At December 31, Gill Co. reported accounts receivable of $236,000 and an allowance for uncollectible accounts of $1,450 (credit) before any adjustments. An analysis of accounts receivable suggests that the allowance for uncollectible accounts should be 2% of accounts receivable. The amount of the adjustment for uncollectible accounts would be: Multiple Choice $1,450 $4.980 $3,270. $4,720
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The trial balance before adjustment of Ehrlich Company reports the following balances: Dr. Cr. Accounts receivable $420,000 Allowance for doubtful accounts (debit balance) $ 5,000 Sales (all on credit) 2,000,000 Sales returns and allowances 70,000 Instructions – show all calculations a. Prepare the entry for estimated bad debts assuming that doubtful accounts are estimated to be 5% of gross accounts receivable. b. Prepare the entry for the estimated bad debts assuming that the company estimates bad debts based on the percentage of sales method, using 2% of net sales.
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