EBK INTERMEDIATE ACCOUNTING: REPORTING
2nd Edition
ISBN: 9781337268998
Author: PAGACH
Publisher: YUZU
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Chapter 6, Problem 11E
Bradford Company’s accounting records on December 31, 2016, provide the following information (prior to adjustment):
Required:
- 1. Prepare the
journal entries to record the estimate of Bradford’s bad debt expense for 2016 assuming:- a.
Bad debts are estimated to be 2% of net credit sales. - b. Bad debts are estimated to be 5% of gross
accounts receivable .
- a.
- 2. Next Level Discuss the advantages and disadvantages of the
balance sheet and income statement approaches to estimating bad debt.
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Castle Company provides estimates for its uncollectible accounts. The allowance for uncollectible accounts had acredit balance of $17,280 at the beginning of 2018 and a $22,410 credit balance at the end of 2018 (after adjusting entries). If the direct write-off method had been used to account for uncollectible accounts (bad debt expenseequals actual write-offs), the income statement for 2018 would have included bad debt expense of $17,100 andrevenue of $2,200 from the collection of previously written off bad debts.Required:Determine bad debt expense for 2018 according to the allowance method.
What is the adjusted balance of the Accounts Receivable account as of December 31, 2016?
Chapter 6 Solutions
EBK INTERMEDIATE ACCOUNTING: REPORTING
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