Randall company estimates it’s bad debts expense by aging its accounts receivable and applying percentages to various age groups of the accounts. Randall calculated a total of $3000 in possible credit losses as of December 31. Accounts receivable has a balance of $128,000 and the allowance for doubtful accounts has a credit balance of $500 before adjustment at December 31. ( The options of shaded blank descriptions are accounts receivable, allowance for doubtful accounts, bad debts expense.)A. What is the December 31 adjusting entry to provide for credit losses?B. What is the net amount of accounts receivable that should be included in current assets? **Accounting for Doubtful Accounts**Randall Company estimates its bad debts expense by aging its accounts receivable and applying percentages to various age groups of the accounts. Randall calculated a total of $3,000 in possible credit losses as of December 31. Accounts Receivable has a balance of $128,000, and the Allowance for Doubtful Accounts has a credit balance of $500 before adjustment at December 31.**Question:**What is the December 31 adjusting entry to provide for credit losses?*General Journal Entry:*| **General Journal** | **Debit** | **Credit** ||---------------------|-----------|------------|| Description | | || | | |**Follow-up Question:**What is the net amount of accounts receivable that should be included in current assets?| **Net Amount: $** |**Explanation of Graphs/Diagrams:**- There are no graphs or diagrams included in the image provided.

The allowance for doubtful accounts is created to record estimated bad debt expense for the period.

Answered: Randall company estimates it’s bad…

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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Randall company estimates it’s bad debts expense by aging its accounts receivable and applying percentages to various age groups of the accounts. Randall calculated a total of $3000 in possible credit losses as of December 31. Accounts receivable has a balance of $128,000 and the allowance for doubtful accounts has a credit balance of $500 before adjustment at December 31. ( The options of shaded blank descriptions are accounts receivable, allowance for doubtful accounts, bad debts expense.) A. What is the December 31 adjusting entry to provide for credit losses? B. What is the net amount of accounts receivable that should be included in current assets?

**Accounting for Doubtful Accounts**

Randall Company estimates its bad debts expense by aging its accounts receivable and applying percentages to various age groups of the accounts. Randall calculated a total of $3,000 in possible credit losses as of December 31. Accounts Receivable has a balance of $128,000, and the Allowance for Doubtful Accounts has a credit balance of $500 before adjustment at December 31.

**Question:**
What is the December 31 adjusting entry to provide for credit losses?

*General Journal Entry:*

| **General Journal** | **Debit** | **Credit** |
|---------------------|-----------|------------|
| Description | | |
| | | |

**Follow-up Question:**
What is the net amount of accounts receivable that should be included in current assets?

| **Net Amount: $** |

**Explanation of Graphs/Diagrams:**

- There are no graphs or diagrams included in the image provided.

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