The J.T. Traverse Company is well known for its Traverse pens. The company recently reported the following amounts in its unadjusted trial balance as of December 31. Accounts Receivable Debits $28,691,000 Credits Allowance for Doubtful Accounts Sales Revenue $948,000 $156,312,000 Prepare the adjusting journal entry required at December 31 for recording Bad Debt Expense. If no entry is required, mark it as No Journal Entry Required. 1. Assume Traverse uses 1/2 of 1 percent of sales to estimate its bad debt expense for the year. The percentage of credit sales method directly calculates Bad Debt Expense. 2. Assume instead that Traverse uses the aging of accounts receivable method and estimates that $999,000 of Accounts Receivables will be uncollectible. The aging of accounts receivable method focuses on calculating what the adjusted Allowance for Doubtful Accounts balance should be. You need to consider the existing balance when determining the adjustment.
The J.T. Traverse Company is well known for its Traverse pens. The company recently reported the following amounts in its unadjusted trial balance as of December 31. Accounts Receivable Debits $28,691,000 Credits Allowance for Doubtful Accounts Sales Revenue $948,000 $156,312,000 Prepare the adjusting journal entry required at December 31 for recording Bad Debt Expense. If no entry is required, mark it as No Journal Entry Required. 1. Assume Traverse uses 1/2 of 1 percent of sales to estimate its bad debt expense for the year. The percentage of credit sales method directly calculates Bad Debt Expense. 2. Assume instead that Traverse uses the aging of accounts receivable method and estimates that $999,000 of Accounts Receivables will be uncollectible. The aging of accounts receivable method focuses on calculating what the adjusted Allowance for Doubtful Accounts balance should be. You need to consider the existing balance when determining the adjustment.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:The J.T. Traverse Company is well known for its Traverse pens.
The company recently reported the following amounts in its
unadjusted trial balance as of December 31.
Accounts Receivable
Debits
$28,691,000
Credits
Allowance for Doubtful Accounts
Sales Revenue
$948,000
$156,312,000
Prepare the adjusting journal entry required at December 31 for
recording Bad Debt Expense. If no entry is required, mark it as
No Journal Entry Required.
1. Assume Traverse uses 1/2 of 1 percent of sales to
estimate its bad debt expense for the year. The
percentage of credit sales method directly calculates Bad
Debt Expense.
2. Assume instead that Traverse uses the aging of accounts
receivable method and estimates that $999,000 of
Accounts Receivables will be uncollectible. The aging of
accounts receivable method focuses on calculating what
the adjusted Allowance for Doubtful Accounts balance
should be. You need to consider the existing balance
when determining the adjustment.
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