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takeAssignment takeAssignmen Mano? nvokerassignments8 takeAssignmen SessionLocato-assignment take&inprogress-false; now.com Calculator Uncollectible Accounts-Percentage of Sales and Percentage of Receivables At the end of the current year, the accounts receivable account of Parker's Nursery Supplies has a debit balance of $344,125. Credit sales are $2,582,000. Record the end-of-period adjusting entry on December 31, in general journal form, for the estimated uncollectible accounts. Assume the following independent conditions existed prior to the adjustment: 1. Allowance for Doubtful Accounts has a credit balance of $2,000 a. The percentage of sales method is used and bad debt expense is estimated to be 1% o cred sales blank f an an our box does not require an entry leave it Page: 1 ACCOUNT TITLENO. REF DOC. POST. DEBIT CREDIT DATE 1 20- Dec. 31 0 b. The percentage of receivables method is used and an analysis of the accounts produces an estimate of $24,430 in uncollectible accounts. If an amount box does not require an entry, leave it blank. Page: 1 DOC. POgT DOC. POST. DEBIT CREDIT DATE ACCOUNT TITLE 1 20-Dec. 31 Previous

Explanation / Answer

Ans. 1 Notes-1

( a ) Debit Credit

Bad Debts Expense a/c 25820

Allowance for doubtful accounts 25820

( To provide for estimated bad debt @ 1 % of 2582000)

( b )

Bad Debts Expense a/c 22430

Allowance for doubtful accounts 22430

( To provide for estimated bad debt of $ 24430 of which $ 2000 is already provided for)

Ans. 2

( a )

Bad Debts Expense a/c 19365

Allowance for doubtful accounts 19365

( To provide for estimated bad debt @ 3/4 of 1 % of 2582000)

( b )

Bad Debts Expense a/c (22360+1120) 23750

Allowance for doubtful accounts 23750

( To provide for estimated bad debt of 22630 where Allowance for doubtful accounts has debit balance of $1120)

Notes -1

Allowance for doubtful accounts is a balance sheet account. In percentage of sales approach ( Income statement approach) bad debt expense are estimated as % of credit sales without considering the balance in Allowance for doubtful accounts

Whereas Percentage of recievables approach ( Balance Sheet approach) takes  into consideration the balance in allowance for doubtful accounts.

And when bad debts are certified, allownace for dountful acounts is debited and accounts recievable account is credited.

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