he ledger of Sunland Company at the end of the current year shows Accounts Recei
ID: 2580133 • Letter: H
Question
he ledger of Sunland Company at the end of the current year shows Accounts Receivable $76,600; Credit Sales $762,400; and Sales Returns and Allowances $42,520.
(Credit account titles are automatically indented when amount is entered. Do not indent manually.)
No.
Account Titles and Explanation
Debit
Credit
(a) If Sunland Company uses the direct write-off method to account for uncollectible accounts, journalize the adjusting entry at December 31, assuming Sunland Company determines that Matisse’s $963 balance is uncollectible. (b) If Allowance for Doubtful Accounts has a credit balance of $1,179 in the trial balance, journalize the adjusting entry at December 31, assuming bad debts are expected to be 11% of accounts receivable. (c) If Allowance for Doubtful Accounts has a debit balance of $550 in the trial balance, journalize the adjusting entry at December 31, assuming bad debts are expected to be 8% of accounts receivable.Explanation / Answer
the following are the required journal entries:
No Account titles and explanation Debit Credit a. Bad debts expense a/c $963 .........To Accounts receivable a/c $963 (being bad debts expense written off to accounts receivable ) b Bad debts expense a/c $7,247 ........To Allowance for doubtful accounts a/c $7,247 (being allowance to be maintained at 11% of accounts receivable =>11% * $76,600 =>$8,426. reduced by credit balance of $1,179 =>$8426-1179 =>$7,247) c Bad debts expense a/c $6,678 ..............TO Allowance for doubtful accounts a/c $6,678 (amount = 8% * $76,600 =>$6,128 + debit balance of $550 =>$6,678)Related Questions
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