Estimating Bad Debts Based on Credit Sales, Aging, and Accounts Receivable. The bookkeeper for a small book store prepared an unadjusted trial balance as shown below (in 000' s): Debit Credit Accounts receivable P 120 Notes receivable, trade 20 Allowance for doubtful accounts 2 Sales revenue P 1,040 Returned sales 30 Purchases 500 Purchase returns and allowances 20 Retained earnings 1,570 Required: 1. Prepare the appropriate entries indicated below. Each item is independent. a. Record bad debt expense if an aging schedule indicates that P10 of the receivable at the end of this year will not be collected. b. In April, four accounts totaling P5 were in excess of 90 days old and were determined by-the collection department to be uncollectible.
Estimating
store prepared an unadjusted
Debit Credit
Accounts receivable P 120
Notes receivable, trade 20
Allowance for doubtful accounts 2
Sales revenue P 1,040
Returned sales 30
Purchases 500
Purchase returns and allowances 20
Required:
1. Prepare the appropriate entries indicated below. Each item is independent.
a. Record bad debt expense if an aging schedule indicates that P10 of the receivable at the end of this year will not be collected.
b. In April, four accounts totaling P5 were in excess of 90 days old and were determined by-the collection department to be uncollectible.
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