A. Calculate bad debt B. Journalize the bad debt and the Allowance for doubtful debt C. Post them on T- account
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.
![Account Receivable Problems
Section 1
On December 31,2020 , Company Dragon Fly has the following information as
presented below
2$
8,720
Account
A/C Receivable at the beginning of the year
ADA [debit balance in the beginning]
Sales
Sales Return
175
25,460
1600
5% of sales
Sales Discount
15% of the sales are cash
The company has decided to estimate bad debt for the year based on 5% sales The
writing off of the debt occurs before the estimation of Allowance for Doubtful debt
[ADA]
Required
Part 1 [ sales Approach
A. Calculate bad debt
B. Journalize the bad debt and the Allowance for doubtful debt
C. Post them on T- account
D. Show the balance extract for the account receivable](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F74eabf8e-f6fb-45cf-9af6-05c60b8c76b1%2F75df50d5-6f3b-42e2-8c8a-350453de1b5d%2Fwe27i1_processed.jpeg&w=3840&q=75)
Step by step
Solved in 2 steps with 2 images
