During the current year, Giatras Electronics recorded credit sales of $680,000. Based on prior experience, it estimates a 3.5 percent bad debt rate on credit sales. Required: 1. Prepare journal entries for each of the following transactions. a. On October 28 of the current year, an account receivable for $2,800 from a prior year was determined to be uncollectible and was written off. b. At year-end, the appropriate bad debt expense adjustment was recorded for the current year. 2. Complete the following tabulation, indicating the amount and effect (+ for increase, - for decrease, and NE for no effect) of each transaction.

During the current year, Giatras Electronics recorded credit sales of $680,000. Based on prior experience, it estimates a 3.5 percent bad debt rate on credit sales. Required: 1. Prepare journal entries for each of the following transactions. a. On October 28 of the current year, an account receivable for $2,800 from a prior year was determined to be uncollectible and was written off. b. At year-end, the appropriate bad debt expense adjustment was recorded for the current year. 2. Complete the following tabulation, indicating the amount and effect (+ for increase, - for decrease, and NE for no effect) of each transaction.

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter6: Business Expenses

Section: Chapter Questions

Problem 44P

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Question

100%

Transaction

Net Sales

Gross Profit

Income from Operations

During the current year, Giatras Electronics recorded credit sales of $680,000. Based on prior experience,
it estimates a 3.5 percent bad debt rate on credit sales.
Required:
1. Prepare journal entries for each of the following transactions.
a. On October 28 of the current year, an account receivable for $2,800 from a prior year was
determined to be uncollectible and was written off.
b. At year-end, the appropriate bad debt expense adjustment was recorded for the current year.
2. Complete the following tabulation, indicating the amount and effect (+ for increase, - for decrease,
and NE for no effect) of each transaction.

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