Here are the questions that needed to be solved. 1)Deborah Company\'s account ba

Question

Here are the questions that needed to be solved. 1)Deborah Company's account balances at December 31 for Accounts Receivable and Allowance for Doubtful Accounts were $2,100,000 and $35,000 (Cr.), respectively. An aging of accounts receivable indicated that $126,000 are expected to become uncollectible. The amount of the adjusting entry for bad debts at December 31 is ? 2)On January 15, 2012, Craig Company received a two-month, 9%, $7,000 note from William Pentel for the settlement of his open account. The entry by Craig Company on January 15, 2012 would include a: a-)debit of $7,105 to Notes Receivable. b-)credit of $7,000 to Notes Receivable. c-)debit of $7,000 to Notes Receivable. d-)credit of $7,105 to Accounts Receivable. 3-)Jack Company provides for bad debts expense at the rate of 2% of credit sales. The following data are available for 2012: Allowance for doubtful accounts, 1/1/12 (Cr.) $ 12,000 Accounts written off as uncollectible during 2012 9,000 Credit sales in 2012 1,500,000 The Allowance for Doubtful Accounts balance at December 31, 2012, should be?

Explanation / Answer

1)Deborah Company's account balances at December 31 for Accounts Receivable and Allowance for Doubtful Accounts were $2,100,000 and $35,000 (Cr.), respectively. An aging of accounts receivable indicated that $126,000 are expected to become uncollectible. The amount of the adjusting entry for bad debts at December 31 is ? 12/31 Allow for Doubtful accts Dr 126,000 Acct Rxable Cr 126,000 2)On January 15, 2012, Craig Company received a two-month, 9%, $7,000 note from William Pentel for the settlement of his open account. The entry by Craig Company on January 15, 2012 would include a: c-)debit of $7,000 to Notes Receivable. 3-)Jack Company provides for bad debts expense at the rate of 2% of credit sales. The following data are available for 2012: Allowance for doubtful accounts, 1/1/12 (Cr.) $ 12,000 Accounts written off as uncollectible during 2012 9,000, Credit sales in 2012 1,500,000 The Allowance for Doubtful Accounts balance at December 31, 2012, should be? 12/31 Bad debt expense (1500,000 x 2%) Dr $30,000 Allowance for doubtful accounts Cr $30,000

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