**Waterway Company Financial Information Prior to Adjustments****Accounts:**- **Accounts Receivable:** $140,500- **Allowance for Doubtful Accounts:** $3,730 (Credit balance)- **Sales Revenue (all on credit):** $816,400- **Sales Returns and Allowances:** $53,360**Instructions for Journal Entry:**Prepare the journal entry to record bad debt expense, assuming the Waterway Company estimates bad debts at:- **(a)** 4% of accounts receivable- **(b)** 4% of accounts receivable, but the Allowance for Doubtful Accounts had a $1,540 debit balance.**Note:** If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. List all debit entries before credit entries.**Journal Entry Template:**| No. | Account Titles and Explanation | Debit | Credit ||-----|---------------------------------|-------|--------|| (a) | | | || | | | || (b) | | | || | | | |Fill in the relevant account titles and amounts based on the calculation requirements for scenarios (a) and (b).

Accounts receivable refers to money that an organization is yet to receive on account of goods and…

Waterway Company reports the following financial information before adjustments. Accounts Receivable Allowance for Doubtful Accounts Sales Revenue (all on credit) Sales Returns and Allowances (a) Dr. $140,500 No. Account Titles and Explanation (b) 53,360 Prepare the journal entry to record bad debt expense assuming Waterway Company estimates bad debts at (a) 4% of accounts receivable and (b) 4% of accounts receivable but Allowance for Doubtful Accounts had a $1,540 debit 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.) Cr. $3,730 816,400 Debit 11 Credit

Waterway Company reports the following financial information before adjustments. Accounts Receivable Allowance for Doubtful Accounts Sales Revenue (all on credit) Sales Returns and Allowances (a) Dr. $140,500 No. Account Titles and Explanation (b) 53,360 Prepare the journal entry to record bad debt expense assuming Waterway Company estimates bad debts at (a) 4% of accounts receivable and (b) 4% of accounts receivable but Allowance for Doubtful Accounts had a $1,540 debit 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.) Cr. $3,730 816,400 Debit 11 Credit

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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