The ledger of Hixson Company at the end of the current year shows Accounts Recei

Question

The ledger of Hixson Company at the end of the current year shows Accounts Receivable $131,300, Sales $843,600, and Sales Returns and Allowances $36,100.



If Hixson uses the direct write-off method to account for uncollectible accounts, journalize the adjusting entry at December 31, assuming Hixson determines that Fell's $2,400 balance is uncollectible.
Date Description/Account Debit Credit
Dec. 31






If Allowance for Doubtful Accounts has a credit balance of $2,300 in the trial balance, journalize the adjusting entry at December 31, assuming bad debts are expected to be (1) 2% of net sales, and (2) 12% of accounts receivable.
Date Description Debit Credit
(1) Dec. 31

(2) Dec. 31






If Allowance for Doubtful Accounts has a debit balance of $260 in the trial balance, journalize the adjusting entry at December 31, assuming bad debts are expected to be (1) 1.25% of net sales and (2) 7% of accounts receivable. (Round answers to 0 decimal places, e.g. 125.)
Date Description Debit Credit
(1) Dec. 31

(2) Dec. 31

Explanation / Answer

If Hixson uses the direct write-off method to account for uncollectible accounts, journalize the adjusting entry at December 31, assuming Hixson determines that Fell's $2,400 balance is uncollectible.
Date Description/Account Debit Credit
Dec. 31
Bad debt expense DEBIT 2400
Accounts receivable CREDIT 2400


If Allowance for Doubtful Accounts has a credit balance of $2,300 in the trial balance, journalize the adjusting entry at December 31, assuming bad debts are expected to be (1) 2% of net sales, and (2) 12% of accounts receivable.
Date Description Debit Credit
(1) Dec. 31
Bad debt expense DEBIT 807500 (.02 * (843,600-36100))
Allowance for uncollectible accounts CREDIT 807500

(2) Dec. 31
Bad debt expense DEBIT 13456 ((.12*131300)-2300)
Allowance for uncollectible accounts CREDIT 13456

If Allowance for Doubtful Accounts has a debit balance of $260 in the trial balance, journalize the adjusting entry at December 31, assuming bad debts are expected to be (1) 1.25% of net sales and (2) 7% of accounts receivable. (Round answers to 0 decimal places, e.g. 125.)
Date Description Debit Credit
(1) Dec. 31
Bad debt expense DEBIT 10093.75 (.0125 * (843,600-36100))
Allowance for uncollectible accounts CREDIT 10093.75

(2) Dec. 31
Bad debt expense DEBIT 9451((.07*131300)+260)
Allowance for uncollectible accounts CREDIT 9451

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