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Question: The J.T. Traverse Company is well known for its Traverse pens. The company recently reported the following amounts in its unadjusted trial balance as of December 31. Accounts Receivable Debits $28,691,000 Credits Allowance for Doubtful Accounts $948,000 $156,312,000 Sales Revenue Part 1: Prepare the adjusting journal entry required at December 31 for recording Bad Debt Expense. If no entry is required, mark it as No Journal Entry Required. 1. Assume Traverse uses 1/2 of 1 percent of sales to estimate its bad debt expense for the year. The percentage of credit sales method directly calculates Bad Debt Expense. 2. Assume instead that Traverse uses the aging of accounts receivable method and estimates that $999,000 of Accounts Receivables will be uncollectible. The aging of accounts receivable method focuses on calculating what the adjusted Allowance for Doubtful Accounts balance should be. You need to consider the existing balance when determining the adjustment. Date General Journal 1. December 31 Bad Debt Expense Debit Credit Allowance for Doubtful Accounts Allowance for Doubtful Accounts 2. December 31 Bad Debt Expense Part 2: Assume instead that Traverse uses the aging of accounts receivable method and estimates that $999,000 of Accounts Receivable will be uncollectible and unadjusted balance in Traverse's Allowance for Doubtful Accounts at December 31 was a debit balance of $11,450. Prepare the adjusting journal entry required at December 31 for recording bad debt expense. Date General Journal Debit Credit December 31 Bad Debt Expense Allowance for Doubtful Accounts

Question: The J.T. Traverse Company is well known for its Traverse pens. The company recently reported the following amounts in its unadjusted trial balance as of December 31. Accounts Receivable Debits $28,691,000 Credits Allowance for Doubtful Accounts $948,000 $156,312,000 Sales Revenue Part 1: Prepare the adjusting journal entry required at December 31 for recording Bad Debt Expense. If no entry is required, mark it as No Journal Entry Required. 1. Assume Traverse uses 1/2 of 1 percent of sales to estimate its bad debt expense for the year. The percentage of credit sales method directly calculates Bad Debt Expense. 2. Assume instead that Traverse uses the aging of accounts receivable method and estimates that $999,000 of Accounts Receivables will be uncollectible. The aging of accounts receivable method focuses on calculating what the adjusted Allowance for Doubtful Accounts balance should be. You need to consider the existing balance when determining the adjustment. Date General Journal 1. December 31 Bad Debt Expense Debit Credit Allowance for Doubtful Accounts Allowance for Doubtful Accounts 2. December 31 Bad Debt Expense Part 2: Assume instead that Traverse uses the aging of accounts receivable method and estimates that $999,000 of Accounts Receivable will be uncollectible and unadjusted balance in Traverse's Allowance for Doubtful Accounts at December 31 was a debit balance of $11,450. Prepare the adjusting journal entry required at December 31 for recording bad debt expense. Date General Journal Debit Credit December 31 Bad Debt Expense Allowance for Doubtful Accounts

FINANCIAL ACCOUNTING
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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Question: The J.T. Traverse Company is well known for its Traverse pens. The company recently reported the following amounts in its unadjusted trial balance as of December 31. Accounts Receivable Debits $28,691,000 Credits Allowance for Doubtful Accounts $948,000 $156,312,000 Sales Revenue Part 1: Prepare the adjusting journal entry required at December 31 for recording Bad Debt Expense. If no entry is required, mark it as No Journal Entry Required. 1. Assume Traverse uses 1/2 of 1 percent of sales to estimate its bad debt expense for the year. The percentage of credit sales method directly calculates Bad Debt Expense. 2. Assume instead that Traverse uses the aging of accounts receivable method and estimates that $999,000 of Accounts Receivables will be uncollectible. The aging of accounts receivable method focuses on calculating what the adjusted Allowance for Doubtful Accounts balance should be. You need to consider the existing balance when determining the adjustment. Date General Journal 1. December 31 Bad Debt Expense Debit Credit Allowance for Doubtful Accounts Allowance for Doubtful Accounts 2. December 31 Bad Debt Expense Part 2: Assume instead that Traverse uses the aging of accounts receivable method and estimates that $999,000 of Accounts Receivable will be uncollectible and unadjusted balance in Traverse's Allowance for Doubtful Accounts at December 31 was a debit balance of $11,450. Prepare the adjusting journal entry required at December 31 for recording bad debt expense. Date General Journal Debit Credit December 31 Bad Debt Expense Allowance for Doubtful Accounts
Transcribed Image Text:Question: The J.T. Traverse Company is well known for its Traverse pens. The company recently reported the following amounts in its unadjusted trial balance as of December 31. Accounts Receivable Debits $28,691,000 Credits Allowance for Doubtful Accounts $948,000 $156,312,000 Sales Revenue Part 1: Prepare the adjusting journal entry required at December 31 for recording Bad Debt Expense. If no entry is required, mark it as No Journal Entry Required. 1. Assume Traverse uses 1/2 of 1 percent of sales to estimate its bad debt expense for the year. The percentage of credit sales method directly calculates Bad Debt Expense. 2. Assume instead that Traverse uses the aging of accounts receivable method and estimates that $999,000 of Accounts Receivables will be uncollectible. The aging of accounts receivable method focuses on calculating what the adjusted Allowance for Doubtful Accounts balance should be. You need to consider the existing balance when determining the adjustment. Date General Journal 1. December 31 Bad Debt Expense Debit Credit Allowance for Doubtful Accounts Allowance for Doubtful Accounts 2. December 31 Bad Debt Expense Part 2: Assume instead that Traverse uses the aging of accounts receivable method and estimates that $999,000 of Accounts Receivable will be uncollectible and unadjusted balance in Traverse's Allowance for Doubtful Accounts at December 31 was a debit balance of $11,450. Prepare the adjusting journal entry required at December 31 for recording bad debt expense. Date General Journal Debit Credit December 31 Bad Debt Expense Allowance for Doubtful Accounts
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