Question
Exercise 8-4
The ledger of Nash's Trading Post, LLC at the end of the current year shows Accounts Receivable $71,600; Credit Sales $865,890; and Sales Returns and Allowances $40,660.
(Credit account titles are automatically indented when amount is entered. Do not indent manually.)
(a) If Nash's Trading Post, LLC uses the direct write-off method to account for uncollectible accounts, journalize the adjusting entry at December 31, assuming Nash's Trading Post, LLC determines that Matisse’s $829 balance is uncollectible. (b) If Allowance for Doubtful Accounts has a credit balance of $1,022 in the trial balance, journalize the adjusting entry at December 31, assuming bad debts are expected to be 10% of accounts receivable. (c) If Allowance for Doubtful Accounts has a debit balance of $520 in the trial balance, journalize the adjusting entry at December 31, assuming bad debts are expected to be 8% of accounts receivable. ? C ii Seoure https edugen.wleyplus.com.eduqen/ti/manuni Return ta Rlxkboard l, Accounting, Ge HV The ledger of Nash's Trading Fost, LLC at the cnd of the current year snows Accounts Receivable S71,000; Credit Sales SB”,890: ?nd Sales Returns nd Allowances S10,000. uncolectible. (a (D] ? If Nash's Trading Post uc uscs the direct writc-orf method to account for uncollcct bla?ccountz, jcurnalizc the od usdng entry at December 31,?2guming Nash's Tracing Post LC dctcrmincs that Matissc : $820 bolancc It Allowance tor Doubttul Accounts has a cradit balance at si,022 in the trial balance. Journalze tne adjusting entry at Dacember assuming bad dabts are expected to be La? or accounts receivable. Reviow Score R view Results 1 obiertive St ly All want far i hthal Ancount haa ad-hit halanca at $520 in the trial halanes, rnali7? tha ad isting ntry at neo n her 31 ? si ming had dehtsara ?nacted t he 8% ofar untq r e ahl Credit account tities are autonatically indented whon amount is anterod. Do not indent manually. No. Account Titles and Explanation Ca) Debit Credit ib) Question Attempts: D ot 3 used avE A1 ?lype here to search
Explanation / Answer
a)Bad debt expense(db)829
Account receivable(cr)829
b)=10%*71600=7160
Adjustment=7160-1022=6138
Bad debt expense(db) 6138
allowance for doubtful accounts(cr) 6138
c)=10%*71600=7160
Adjustment=7160+520=7680
Bad debt expense(db) 7680
allowance for doubtful accounts(cr) 7680
