uncan Company reports the following financial information before adjustments. Dr
ID: 2416865 • Letter: U
Question
uncan Company reports the following financial information before adjustments.
Dr.
Cr.
Prepare the journal entry to record bad debt expense assuming Duncan Company estimates bad debts at (a) 2% of net sales and (b) 5% of accounts receivable. (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. Do not indent manually.)
No.
Account Titles and Explanation
Debit
Credit
SHOW LIST OF ACCOUNTS
Dr.
Cr.
Accounts Receivable $155,900 Allowance for Doubtful Accounts $3,400 Sales Revenue (all on credit) 817,900 Sales Returns and Allowances 50,200Explanation / Answer
Duncan company Details Amt $ Sales Revenue 817,900.00 Sales Return (50,200.00) Net Sales 767,700.00 a Bad debt estimate @2% of net sales 15,354.00 Existing balance in Allowance for Doubtful accounts 3,400.00 Additional allowance required 11,954.00 b Accounts receivable balance 155,900.00 Bad debt estimate @5% of Accounts receivable balance 7,795.00 Existing balance in Allowance for Doubtful accounts 3,400.00 Additional allowance required 4,395.00 Journal Entry No Account Title Dr $ Cr $ a Bad Debt Expense 11,954.00 Allowance for Doubtful Accounts 11,954.00 b Bad Debt Expense 4,395.00 Allowance for Doubtful Accounts 4,395.00
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