On December 31, 2011, the unadjusted trial balance of Pete Inc., included the following accounts: Debit Credit Sales (90% represent credit sales) $900,000 Accounts receivable $300,000 Allowance for doubtful accounts $300 Assume Pete estimates bad debt expense as 1% of credit sales. Prepare the adjusting entry for bad debt on December 31, 2011. Instead of #1, Assume Pete estimates bad debt expense as 3% of year-end gross accounts receivable. Prepare the adjusting entry for bad debt on December 31, 2011. Based on your answer in #2, Assume Pete estimates bad debt expense as 3% of year-end gross accounts receivable. After the adjusting entry, the net realizable value of Pete's accounts receivable in December 31, 2011, balance sheet is $____ Based on your answer in #2, Pete writes off an uncollectible customer account on January 8, 2012 in the amount of $800. Prepare the journal entry to write off the uncollectible account receivable. Based on your answer in #4, After the entry to write off the account receivable on January 8, 2012 the net realizable value of Pete's accounts receivables in January 8, 2012 balance sheet is $____
On December 31, 2011, the unadjusted trial balance of Pete Inc., included the following accounts: Debit Credit Sales (90% represent credit sales) $900,000 Accounts receivable $300,000 Allowance for doubtful accounts $300 Assume Pete estimates bad debt expense as 1% of credit sales. Prepare the adjusting entry for bad debt on December 31, 2011. Instead of #1, Assume Pete estimates bad debt expense as 3% of year-end gross accounts receivable. Prepare the adjusting entry for bad debt on December 31, 2011. Based on your answer in #2, Assume Pete estimates bad debt expense as 3% of year-end gross accounts receivable. After the adjusting entry, the net realizable value of Pete's accounts receivable in December 31, 2011, balance sheet is $____ Based on your answer in #2, Pete writes off an uncollectible customer account on January 8, 2012 in the amount of $800. Prepare the journal entry to write off the uncollectible account receivable. Based on your answer in #4, After the entry to write off the account receivable on January 8, 2012 the net realizable value of Pete's accounts receivables in January 8, 2012 balance sheet is $____
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Concept explainers
Bad Debts
At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
Question
On December 31, 2011, the unadjusted
| Debit | Credit | |
| Sales (90% represent credit sales) | $900,000 | |
| |
$300,000 | |
| Allowance for doubtful accounts | $300 |
- Assume Pete estimates
bad debt expense as 1% of credit sales. Prepare theadjusting entry for bad debt on December 31, 2011. - Instead of #1, Assume Pete estimates bad debt expense as 3% of year-end gross accounts receivable. Prepare the adjusting entry for bad debt on December 31, 2011.
- Based on your answer in #2, Assume Pete estimates bad debt expense as 3% of year-end gross accounts receivable. After the adjusting entry, the net realizable value of Pete's accounts receivable in December 31, 2011,
balance sheet is $____ - Based on your answer in #2, Pete writes off an uncollectible customer account on January 8, 2012 in the amount of $800. Prepare the
journal entry to write off the uncollectible account receivable. - Based on your answer in #4, After the entry to write off the account receivable on January 8, 2012 the net realizable value of Pete's accounts receivables in January 8, 2012 balance sheet is $____
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