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

Question

Exercise 8-4 The ledger of Sheffield Corp. at the end of the current year shows Accounts Receivable $80,300; Credit Sales $769,390; and Sales Returns and Allowances $41,700. (a) If Sheffield Corp. uses the direct write-off method to account for uncollectible accounts, journalize the adjusting entry at (b) If Allowance for Doubtful Accounts has a credit balance of $1,112 in the trial balance, journalize the adjusting entry at December (c) If Allowance for Doubtful Accounts has a debit balance of $450 in the trial balance, journalize the adjusting entry at December December 31, assuming Sheffield Corp. determines that Matisse's $820 balance is uncollectible. 31, assuming bad debts are expected to be 11% of accounts receivable. 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 fc:5

Explanation / Answer

Journal Entry Date Particulars Dr. Amt. Cr. Amt. (a) Bad Debts                                                          Dr.             820 To Accounts Receivable             820 (b) Bad Debts                                                           Dr.          7,721 To Allowance for Doubtful Accounts          7,721 Bad Debt Expenses = ($80,300 X 11%) - $1,112 Bad Debt Expenses = $8,833 - $1,112 = $7,721 © Bad Debts                                                           Dr.          7,677 To Allowance for Doubtful Accounts          7,677 Bad Debt Expenses = ($80,300 X 9%) + $450 Bad Debt Expenses = $7,227 + $450 Bad Debt Expenses = $

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