1.Record the entry for bad debt expenses under the percentage of credit sales me

Question

1.Record the entry for bad debt expenses under the percentage of credit sales method.

2.Record the entry for bad debt expenses under the aging of accounts receivable method.

3. Record the adjusting entry for bad debts as of December 31, 2012 using the aging of accounts receivable method.

Rogala Foods, Inc. sells Oscar Mayer, Jell-O, Tassimo, and many other food brands. The company reported the following rounded amounts as of December 29, 2012 (all amounts in millions):

1.Record the entry for bad debt expenses under the percentage of credit sales method.

2.Record the entry for bad debt expenses under the aging of accounts receivable method.

3. Record the adjusting entry for bad debts as of December 31, 2012 using the aging of accounts receivable method.

Explanation / Answer

1.Record the entry for bad debt expenses under the percentage of credit sales method.

Bad Debt Expenses = 0.5%*18900 = $ 94.50

Journal Entry

2.Record the entry for bad debt expenses under the aging of accounts receivable method.

Bad Debt Expenses = Balance in Allowance for doubtful debt at the end needed - Balance in Allowance for doubtful debt before adjustment

Bad Debt Expenses = 86 - 46

Bad Debt Expenses = $ 40

Journal Entry

3. Record the adjusting entry for bad debts as of December 31, 2012 using the aging of accounts receivable method

Bad Debt Expenses = Balance in Allowance for doubtful debt at the end needed + Debit Balance in Allowance for doubtful debt before adjustment

Bad Debt Expenses = 86 + 26

Bad Debt Expenses = $ 112

Journal Entry

Account Title & Explaination Debit Credit Bad Debt Expenses         94.50 Allowances for Doubtful Debt         94.50

Related Questions

Navigate

• Browse (All)
• Browse 1
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.