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Question: Tony Company at the end of the fiscal 2014 year has the following information: Credit Sales, $2,500,000 Sales Returns & Allowances $25,000 Accounts Receivable $200,000 and Allowance for Doubtful Accounts with a debit o $1,500. Required: a. Prepare the general journal entry to record the end of the year adjusting entry if Tony uses 0.5% of Net Credit Sales as the basis for determining Bad Debt Expense. b. Prepare the general journal entry to record the end of the year adjusting entry if Tony uses 5% of Accounts Receivable as the basis for determining Bad Debt Expense.

Question: Tony Company at the end of the fiscal 2014 year has the following information: Credit Sales, $2,500,000 Sales Returns & Allowances $25,000 Accounts Receivable $200,000 and Allowance for Doubtful Accounts with a debit o $1,500. Required: a. Prepare the general journal entry to record the end of the year adjusting entry if Tony uses 0.5% of Net Credit Sales as the basis for determining Bad Debt Expense. b. Prepare the general journal entry to record the end of the year adjusting entry if Tony uses 5% of Accounts Receivable as the basis for determining Bad Debt Expense.

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: Tony Company at the end of the fiscal 2014 year has the following information: Credit Sales, $2,500,000 Sales Returns & Allowances $25,000 Accounts Receivable $200,000 and Allowance for Doubtful Accounts with a debit o $1,500. Required: a. Prepare the general journal entry to record the end of the year adjusting entry if Tony uses 0.5% of Net Credit Sales as the basis for determining Bad Debt Expense. b. Prepare the general journal entry to record the end of the year adjusting entry if Tony uses 5% of Accounts Receivable as the basis for determining Bad Debt Expense.
Transcribed Image Text:Question: Tony Company at the end of the fiscal 2014 year has the following information: Credit Sales, $2,500,000 Sales Returns & Allowances $25,000 Accounts Receivable $200,000 and Allowance for Doubtful Accounts with a debit o $1,500. Required: a. Prepare the general journal entry to record the end of the year adjusting entry if Tony uses 0.5% of Net Credit Sales as the basis for determining Bad Debt Expense. b. Prepare the general journal entry to record the end of the year adjusting entry if Tony uses 5% of Accounts Receivable as the basis for determining Bad Debt Expense.
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