The adjusted trial balance before adjustment of Marigold Inc. shows the following balances. Accounts Receivable Allowance for Doubtful Accounts Sales Revenue (all on credit) Dr. $77,400 1,505 Cr. $584,800 Give the entry for estimated bad debts assuming that the allowance is to provide for doubtful accounts on the basis of (a) 4% of gross accounts receivable and (b) 5% of gross accounts receivable and Allowance for Doubtful Accounts has a $1,435 credit balance. (If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually. List all debit entries before credit entries.)
Bad Debts
At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
![The adjusted trial balance before adjustment of Marigold Inc. shows the following balances.
Accounts Receivable
Allowance for Doubtful Accounts
Sales Revenue (all on credit)
(a)
No. Account Titles and Explanation
(b)
Give the entry for estimated bad debts assuming that the allowance is to provide for doubtful accounts on the basis of (a) 4% of gross
accounts receivable and (b) 5% of gross accounts receivable and Allowance for Doubtful Accounts has a $1,435 credit balance. (If no
entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when the
amount is entered. Do not indent manually. List all debit entries before credit entries.)
Bad Debt Expense
$77,400
1,505
Dr.
Allowance for Doubtful Accounts
Bad Debt Expense
Allowance for Doubtful Accounts
Cr.
$584,800
Debit
4601
2170
Credit
4601
2170](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fef815287-36e3-42d7-a9db-6705c2bbd9da%2F2033e9c0-1e51-436d-8412-a7cbdea233b7%2Fy962itko_processed.jpeg&w=3840&q=75)
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