The following account balances are those of Music Land Supply Company as of December 31, the end of the fiscal year, before adjustments. Accounts Receivable $ 43,600 Allowance for Bad Debts 180 cr. Credit Sales 470,000 Required: Prepare the necessary adjusting entry to record Bad Debt Expense in each of the following independent cases. a. Uncollectible accounts are estimated at 1.5% of credit sales. If an amount box does not require an entry, leave it blank.
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 following account balances are those of Music Land Supply Company as of December 31, the end of the fiscal year, before adjustments.
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$ 43,600
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| Allowance for |
180
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cr.
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|
| Credit Sales |
470,000
|
Required:
Prepare the necessary
a. Uncollectible accounts are estimated at 1.5% of credit sales. If an amount box does not require an entry, leave it blank.
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