**Information for Questions 2.1 - 2.2**LA Fashion has credit sales of $6,400,000 for the financial year ending June 30, 2021. It estimates that at the end of the financial year, five percent of accounts receivable will not be received. Accounts receivable total $3,100,000. The corporation uses the allowance method to account for bad debts, based on the percentage of receivables approach. **Question 2.1:**During 2021 a customer defaults on a $18,000 balance related to goods purchased during 2021. The corporation determines that this amount will not be recoverable and removes it from their records. Identify the accounts used in the journal entry to remove the amount from their records (noting above, that the corporation uses the allowance method to account for bad debts).- [Select] _____ 18,000- [Select] _____ 18,000**Question 2.2**Using the percentage of receivables approach to calculate the amount of bad debt expense incurred, record the adjusting entry for the bad debt expense for the financial year end June 30, 2021. The credit balance in the "allowance for bad debts" account is $34,000 prior to the adjusting entry.- [Select] _____- [Select] _____- [Select] _____- [Select] _____

Allowance for doubtful accounts - Allowance for doubtful accounts is the provision made by the…

Read the following information to answer questions 2.1 - 2.2. LA Fashion has credit sales of $6,400,000 for the financial year ending June 30, 2021, and estimates at the end of the financial year that five per cent of accounts receivable will not be received. Accounts receivable total $3,100,000. The corporation uses the allowance method to account for bad debts, based on the percentage of receivables approach.

Read the following information to answer questions 2.1 - 2.2. LA Fashion has credit sales of $6,400,000 for the financial year ending June 30, 2021, and estimates at the end of the financial year that five per cent of accounts receivable will not be received. Accounts receivable total $3,100,000. The corporation uses the allowance method to account for bad debts, based on the percentage of receivables approach.

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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