Exercise 8-4 The ledger of Bramble Corp. at the end of the current year shows Ac

Question

Exercise 8-4 The ledger of Bramble Corp. at the end of the current year shows Accounts Receivable $74,700; Credit Sales $870,160; and Sales Returns and Allowances $36,960 a If Bramble Corp. uses the direct write-off method to account for uncollectible accounts, journalize the adjusting entry at December 31, assuming Bramble Corp. determines that Matisse's $829 balance is uncollectible. (b) 1f Allowance for Doubtful Accounts has a credit balance of $1,023 in the trial balance, journalize the adjusting entry at December 31, assuming bad debts are expected to be 9% of accounts receivable (c) if Allowance for Doubtful Accounts has a debit balance of $480 in the trial balance, journalize the adjusting entry at December 31, assuming bad debts are expected to be 9% of accounts receivable (Credit account titles are automatically indented when amount is entered. Do not indent manually.) No. Account Titles and Explanation Debit Credit

Explanation / Answer

Ans)

a) Bad debt expense 829

Accounts receivable 829

b) 9% of accounts receivable

74,700 X 9% = 6723

6723 - 1023 credit balance = 5700

Adjustment

Bad debt expense 5700

Allowance for doubtful accounts 5700

c) 9% of accounts receivable

74700 X 9% = 6723

6723 + 480 debit balance = 7203

Bad debt expense 7203

Allowance for doubtful accounts 7203

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