Mazie Supply Co. uses the percent of accounts receivable method. On December 31, it has outstanding accounts receivable of $86,500, and it estimates that 5% will be uncollectible. Prepare the year-end adjusting entry to record bad debts expense under the assumption that the Allowance for Doubtful Accounts has: (a) a $1,471 credit balance before the adjustment. (b) a $433 debit balance before the adjustment.
Mazie Supply Co. uses the percent of accounts receivable method. On December 31, it has outstanding accounts receivable of $86,500, and it estimates that 5% will be uncollectible. Prepare the year-end adjusting entry to record bad debts expense under the assumption that the Allowance for Doubtful Accounts has: (a) a $1,471 credit balance before the adjustment. (b) a $433 debit balance before the adjustment.
Chapter1: Financial Statements And Business Decisions
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Transcribed Image Text:Mazie Supply Co. uses the percent of accounts receivable method. On December 31, it has outstanding accounts receivable of
$86,500, and it estimates that 5% will be uncollectible.
Prepare the year-end adjusting entry to record bad debts expense under the assumption that the Allowance for Doubtful Accounts
has:
(a) a $1,471 credit balance before the adjustment.
(b) a $433 debit balance before the adjustment.
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1 Prepare the year-end adjusting entry to record bad
debts expense under the assumption that the
Allowance for Doubtful Accounts has a $1,471 credit
balance before the adjustment.
se under
1,471
2 Prepare the year-end adjusting entry to record bad
debts expense under the assumption that the
Allowance for Doubtful Accounts has a $433 debit
balance before the adjustment.
2
Credit
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