Please do not provide answer not image formate thank you. A company reports a year end credit sales in the amount of 390,000 and accounts receivable of $85,500. The company uses the balance sheet method to report bad debt estimation. The estimation percentage is 3.5%. There is a current debut balance of $2,000 in the bad debt account and a $2,000 credit balance in the allowance for doubtful accounts. Record the journal entry using the income statement method. Then record this transaction using T accounts. edit: The transaction is to be recorded with the balance sheet method and not the income statement method*
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.
Please do not provide answer not image formate thank you.
A company reports a year end credit sales in the amount of 390,000 and
Record the
Then record this transaction using T accounts.
edit: The transaction is to be recorded with the balance sheet method and not the income statement method*
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