The following unadjusted balances of Beta Company are presented at August 31, 2023: Dr. Cr. Accounts receivable Sales returns and allowances Allowance for doubtful accounts Credit Sales Required: $100 000 40 000 2 500 $750 000

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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The following unadjusted balances of Beta Company are presented at August 31, 2023:
Dr.
Cr.
Accounts receivable
Sales returns and allowances
Allowance for doubtful accounts
Credit Sales
Dr.
Required:
(a) Prepare the journal entry for estimated bad debts assuming that doubtful accounts are estimated to be 6% of gross accounts receivable.
Cr.
$100 000
40 000
2 500
Dr.
$750 000
Cr.
(b) Prepare the journal entry for estimated bad debts assuming that doubtful accounts are estimated to be 1% of net sales
193
$
$
Transcribed Image Text:The following unadjusted balances of Beta Company are presented at August 31, 2023: Dr. Cr. Accounts receivable Sales returns and allowances Allowance for doubtful accounts Credit Sales Dr. Required: (a) Prepare the journal entry for estimated bad debts assuming that doubtful accounts are estimated to be 6% of gross accounts receivable. Cr. $100 000 40 000 2 500 Dr. $750 000 Cr. (b) Prepare the journal entry for estimated bad debts assuming that doubtful accounts are estimated to be 1% of net sales 193 $ $
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Step 1: Introduction

Accounts receivables means account of those customers to whom business has made credit sales and amount has not been received. Sometimes, business estimates that some of the accounts receivables will not be collected. Business can make allowance for these uncollectible accounts. 

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