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Name: BioWare’s year-end unadjusted trial balance shows accounts receivable
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Description: BioWare’s year-end unadjusted trial balance shows accounts receivable of $17,000 and sales of $150,000. Uncollectibles are estimated to be 2% of sales.Prepare the December 31 year-end adjusting entry for uncollectibles using the percent of sales meth

Business

Accounting

Prepare the December 31 year-end adjusting entry for uncollectibles using the percent of sales method.

College Accounting (Book Only): A Career Approach

12th Edition

ISBN:9781305084087

Author:Cathy J. Scott

Publisher:Cathy J. Scott

ChapterB: Bad Debts

Section: Chapter Questions

Problem 1P

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Concept explainers

Inventory Valuation

Before discussing the topic inventory valuation let’s discuss the meaning of inventory. In accounting, inventory is also known as stock. Inventory means all the finished goods, materials, merchandise that a business holds for the purpose of selling it in the market with the motive of earning profit.

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BioWare’s year-end unadjusted trial balance shows accounts receivable of $17,000 and sales of $150,000. Uncollectibles are estimated to be 2% of sales.

Prepare the December 31 year-end adjusting entry for uncollectibles using the percent of sales method.

Definition Definition Money that the business will be receiving from its clients who have utilized the credit provided to buy its goods and services. The credit period typically lasts for a short term, lasting from a few days, a few months, to a year.

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