Tashamo Corporation was formed in 2015 with the merger of PWW Foods Incorporated and Henderson Incorporated. The company reported the following rounded amounts for the year ended December 29, 2018 (all amounts in millions): Accounts Receivable Debits $ 1,160 Credits Allowance for Doubtful Accounts Sales (assume all on credit) $ 35 18,700 Required: 1. Assume Tashamo uses 1/4 of 1 percent of sales to estimate its Bad Debt Expense for the year. Prepare the adjusting journal entry required for the year, assuming no Bad Debt Expense has been recorded yet. 2. Assume instead Tashamo uses the aging of accounts receivable method and estimates that $84 of its Accounts Receivable will be uncollectible. Prepare the adjusting journal entry required at December 29, 2018, for recording Bad Debt Expense. 3. Assume instead Tashamo's uses the aging of accounts receivable method and estimates that $84 of its Accounts Receivable will be uncollectible. Prepare the adjusting journal entry required at December 29, 2018, for recording Bad Debt Expense assuming Tashamo's unadjusted balance in Allowance for Doubtful Accounts at December 29, 2018, was a debit balance of $24. 4. If one of Tashamo's customers declared bankruptcy, what journal entry would be used to write off its $20 balance?
Tashamo Corporation was formed in 2015 with the merger of PWW Foods Incorporated and Henderson Incorporated. The company reported the following rounded amounts for the year ended December 29, 2018 (all amounts in millions): Accounts Receivable Debits $ 1,160 Credits Allowance for Doubtful Accounts Sales (assume all on credit) $ 35 18,700 Required: 1. Assume Tashamo uses 1/4 of 1 percent of sales to estimate its Bad Debt Expense for the year. Prepare the adjusting journal entry required for the year, assuming no Bad Debt Expense has been recorded yet. 2. Assume instead Tashamo uses the aging of accounts receivable method and estimates that $84 of its Accounts Receivable will be uncollectible. Prepare the adjusting journal entry required at December 29, 2018, for recording Bad Debt Expense. 3. Assume instead Tashamo's uses the aging of accounts receivable method and estimates that $84 of its Accounts Receivable will be uncollectible. Prepare the adjusting journal entry required at December 29, 2018, for recording Bad Debt Expense assuming Tashamo's unadjusted balance in Allowance for Doubtful Accounts at December 29, 2018, was a debit balance of $24. 4. If one of Tashamo's customers declared bankruptcy, what journal entry would be used to write off its $20 balance?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Transcribed Image Text:Tashamo Corporation was formed in 2015 with the merger of PWW Foods Incorporated and Henderson
Incorporated. The company reported the following rounded amounts for the year ended December 29, 2018 (all
amounts in millions):
Accounts Receivable
Debits
$ 1,160
Credits
Allowance for Doubtful Accounts
Sales (assume all on credit)
$ 35
18,700
Required:
1. Assume Tashamo uses 1/4 of 1 percent of sales to estimate its Bad Debt Expense for the year. Prepare the
adjusting journal entry required for the year, assuming no Bad Debt Expense has been recorded yet.
2. Assume instead Tashamo uses the aging of accounts receivable method and estimates that $84 of its Accounts
Receivable will be uncollectible. Prepare the adjusting journal entry required at December 29, 2018, for recording
Bad Debt Expense.
3. Assume instead Tashamo's uses the aging of accounts receivable method and estimates that $84 of its Accounts
Receivable will be uncollectible. Prepare the adjusting journal entry required at December 29, 2018, for recording
Bad Debt Expense assuming Tashamo's unadjusted balance in Allowance for Doubtful Accounts at December
29, 2018, was a debit balance of $24.
4. If one of Tashamo's customers declared bankruptcy, what journal entry would be used to write off its $20
balance?
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