Please answer the following The following unadjusted balances of Echo Company are presented at September 30, 2023: Dr. Cr. Accounts receivable $100 000 Sales returns and allowances 40 000 Allowance for doubtful accounts $ 2 500 Credit Sales 750 000
Please answer the following
The following unadjusted balances of Echo Company are presented at September 30, 2023:
|
|
Dr. |
Cr. |
|
|
$100 000 |
|
|
Sales returns and allowances |
40 000 |
|
|
Allowance for doubtful accounts |
|
$ 2 500 |
|
Credit Sales |
|
750 000 |
Required:
(a) Prepare the
|
Dr. |
$ |
|
|
Cr. |
|
$ |
(b) Prepare the journal entry for estimated bad debts assuming that doubtful accounts are estimated to be 1% of net sales
|
Dr. |
$ |
|
|
Cr. |
|
$ |
Uncollectible Accounts = Gross Accounts receivable× percentage of uncollectible
Bad debt- expense = Uncollectible accounts-credit balance of allowance for doubtful accounts.
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