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Losses Based or Lewis Company uses th al credit sales which were $1,500,000 during the year. On December had a credit balance of $60,200 before adjustment.

Losses Based or Lewis Company uses th al credit sales which were $1,500,000 during the year. On December had a credit balance of $60,200 before adjustment.

FINANCIAL ACCOUNTING
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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Credit Losses Based on Credit Sales Lewis Company uses the allowance method for recording its expected credit losses. It estimates credit losses at 6% of credit sales which were $1,500,000 during the year. On December 31, the Accounts Receivable balance was $650,000 and the Allowance for Doubtful Accounts had a credit balance of $60,200 before adjustment. a. Prepare the adjusting entry to record the credit losses for the year. b. Show how Accounts Receivable and the Allowance for Doubtful Accounts would appear in the December 31 balance sheet. а. General Journal Date Description Debit Credit Dec.31 Bad Debts Expense 90,000 Allowance for Doubtful Accounts 90,000 To record allowance for credit losses. Current Assets: Accounts Receivable 650,000 Less: Allowance for Do + b. (Do not use negative signs with your answers) Check
Transcribed Image Text:Credit Losses Based on Credit Sales Lewis Company uses the allowance method for recording its expected credit losses. It estimates credit losses at 6% of credit sales which were $1,500,000 during the year. On December 31, the Accounts Receivable balance was $650,000 and the Allowance for Doubtful Accounts had a credit balance of $60,200 before adjustment. a. Prepare the adjusting entry to record the credit losses for the year. b. Show how Accounts Receivable and the Allowance for Doubtful Accounts would appear in the December 31 balance sheet. а. General Journal Date Description Debit Credit Dec.31 Bad Debts Expense 90,000 Allowance for Doubtful Accounts 90,000 To record allowance for credit losses. Current Assets: Accounts Receivable 650,000 Less: Allowance for Do + b. (Do not use negative signs with your answers) Check
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