Nichols Company uses the percentage of accounts receivables method for recording bad debts expense. The month-end accounts receivable balance is $250,000. Management estimates that 4% of accounts receivable will be not be collected in cash. The Allowance for doubtful accounts has a credit balance of $2,500 before adjustment. The adjusting entry that Nichols must make includes: O a. a debit to bad debt expense for $10,000. O b. a credit to the allowance for $30,000. O C. a credit to the allowance for $7,500. O d. a debit to bad debt expense for $40,000.

Nichols Company uses the percentage of accounts receivables method for recording bad debts expense. The month-end accounts receivable balance is $250,000. Management estimates that 4% of accounts receivable will be not be collected in cash. The Allowance for doubtful accounts has a credit balance of $2,500 before adjustment. The adjusting entry that Nichols must make includes: O a. a debit to bad debt expense for $10,000. O b. a credit to the allowance for $30,000. O C. a credit to the allowance for $7,500. O d. a debit to bad debt expense for $40,000.

Name: Nichols Company uses the percentage of accounts receivables method fo
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Description: Nichols Company uses the percentage of accounts receivables method for recording bad debts expense. The month-end accounts receivablebalance is $250,000. Management estimates that 4% of accounts receivable will be not be collected in cash. The Allow

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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