**ADF Manufacturing Financial Reporting for 2018****Company Background:**ADF Manufacturing was formed in 2015 through the merger of Miller Foods Corporation and Rogala Foods Incorporated. For the fiscal year ended December 29, 2018, the company reported the following rounded amounts (in millions):| Accounts | Debits | Credits ||------------------------|---------|-------------|| Accounts Receivable | $1,020 | || Allowance for Doubtful Accounts | | $28 || Sales (all on credit) | | $1,700 |**Required:**1. **Estimate Bad Debt Expense Using Sales Percentage:** - **Instruction:** Assume ADF uses 3/4 of 1 percent of sales to estimate its Bad Debt Expense for the year. Prepare the adjusting journal entry required for the year, assuming no Bad Debt Expense has been recorded yet.2. **Estimate Bad Debt Expense Using Receivables Percentage:** - **Instruction:** Assume ADF uses the aging of accounts receivable method and estimates that 5% of its Accounts Receivable will be uncollectible. Prepare the adjusting journal entry required at December 29, 2018, for recording Bad Debt Expense.3. **Alternative Scenario for Uncollectible Estimate:** - **Instruction:** Assume instead that ADF’s aging of accounts receivable method estimates that 5% of its Accounts Receivable will be uncollectible. The Allowance for Doubtful Accounts account at December 29, 2018, before recording Bad Debt Expense assuming ADF’s uncollectible estimate has a debit balance of $40. Prepare the adjusting journal entry required at December 29, 2018, for recording Bad Debt Expense.4. **Customer Bankruptcy Write-Off:** - **Instruction:** If one of ADF's customers declared bankruptcy, what journal entry would be used to write off its $10 balance?**Online Interaction:**You'll find an interactive form below where you can enter your answers for each required task. Click on each tab to enter the corresponding journal entry.**Interactive Tabs:**- Required 1- Required 2- Required 3- Required 4 **Example Input:**Assume ADF uses 3/4 of 1 percent of sales to estimate its Bad Debt Expense for the year. Prepare the adjusting journal entry required for the year,

Adjusting Entries -Adjusting Entries are necessary adjustments required to make to correctly record…

ADF Manufacturing was formed in 2015 with the merger of Miller Foods Corporation and Rogala Foods Incorporated. The company reported the following rounded amounts for the year ended December 29, 2018 (all amounts in millions): Accounts Receivable Allowance for Doubtful Accounts Debits $1,020 Credits $20 17,300 Required: 1. Assume ADF uses 3/4 of 1 percent of sales to estimate its Bad Debt Expense for the year. Prepare the adjusting journal entry required for the year, assuming no Bad Debt Expense has been recorded yet. 2. Assume instead ADF uses the aging of accounts receivable method and estimates that $79 of its Accounts Receivable will be uncollectible. Prepare the adjusting journal entry required at December 29, 2018, for recording Bad Debt Expense. 3. Assume instead ADF's uses the aging of accounts receivable method and estimates that $79 of its Accounts Receivable will be uncollectible. Prepare the adjusting journal entry required at December 29, 2018, for recording Bad Debt Expense assuming ADF's unadjusted balance in Allowance for Doubtful Accounts at December 29, 2018, was a debit balance of $40. 4. If one of ADF's customers declared bankruptcy, what journal entry would be used to write off its $10 balance?

ADF Manufacturing was formed in 2015 with the merger of Miller Foods Corporation and Rogala Foods Incorporated. The company reported the following rounded amounts for the year ended December 29, 2018 (all amounts in millions): Accounts Receivable Allowance for Doubtful Accounts Debits $1,020 Credits $20 17,300 Required: 1. Assume ADF uses 3/4 of 1 percent of sales to estimate its Bad Debt Expense for the year. Prepare the adjusting journal entry required for the year, assuming no Bad Debt Expense has been recorded yet. 2. Assume instead ADF uses the aging of accounts receivable method and estimates that $79 of its Accounts Receivable will be uncollectible. Prepare the adjusting journal entry required at December 29, 2018, for recording Bad Debt Expense. 3. Assume instead ADF's uses the aging of accounts receivable method and estimates that $79 of its Accounts Receivable will be uncollectible. Prepare the adjusting journal entry required at December 29, 2018, for recording Bad Debt Expense assuming ADF's unadjusted balance in Allowance for Doubtful Accounts at December 29, 2018, was a debit balance of $40. 4. If one of ADF's customers declared bankruptcy, what journal entry would be used to write off its $10 balance?

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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