Chapter 7, Problem 44AP

1.

To determine

Prepare the necessary journal entries for the month of November along with the adjusting journal entry to record bad debts expense and prepare the T-accounts for Accounts Receivable, Allowance for Uncollectible Accounts, and Bad Debt Expense for the month of November using allowance method.

2.

To determine

Prepare the necessary journal entries for the month of November and prepare the T-accounts for Accounts Receivable and Bad Debt Expense for the month of November using direct write-off method.

3.

To determine

Determine the amount of bad debt expense that the Incorporation AAE would report on its November 30 income statement under each of the two methods, and identify the amount that matches the expenses better with revenue, with the reasons.

4.

To determine

Determine the amount of net accounts receivable that the Incorporation AAE would report on its November 30 balance sheet under each of the two methods, and identify the amount that is more realistic, with reasons.