The ledger of Costello Company at the end of the current year shows Accounts Rec

Question

The ledger of Costello Company at the end of the current year shows Accounts Receivable $134,300, Sales Revenue $845,800, and Sales Returns and Allowances $30,400. The ledger of Costello Company at the end of the current year shows Accounts Receivable $134,300, Sales Revenue $845,800, and Sales Returns and Allowances $30,400. If Costello uses the direct write-off method to account for uncollectible accounts, journalize the adjusting entry at December 31, assuming Costello determines that L. Dole If Costello uses the direct write-off method to account for uncollectible accounts, journalize the adjusting entry at December 31, assuming Costello determines that L. Dole The ledger of Costello Company at the end of the current year shows Accounts Receivable $134,300, Sales Revenue $845,800, and Sales Returns and Allowances $30,400. The ledger of Costello Company at the end of the current year shows Accounts Receivable $134,300, Sales Revenue $845,800, and Sales Returns and Allowances $30,400. If Costello uses the direct write-off method to account for uncollectible accounts, journalize the adjusting entry at December 31, assuming Costello determines that L. Dole's $2,500 balance is uncollectible. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) If Allowance for Doubtful Accounts has a credit balance of $2,500 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) 11% of accounts receivable. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) If Allowance for Doubtful Accounts has a debit balance of $250 in the trial balance, journalize the adjusting entry at December 31, assuming bad debts are expected to be (1) 1% of net sales and (2) 7% of accounts receivable. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Explanation / Answer

dr Bad Debts Expense $2,500
cr Account Receivable $2,500

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dr Bad Debts Expense 12273
cr Allowance for doubtful accoun12273
[($134,300 x 11%) - 2500] = 12273

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dr Bad Debts Expense 6200
cr Allowance for Doubtful Accounts6200
[(85,000 x 7%) + 250] =6200

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