The J.T. Traverse Company is well known for its Traverse pens. The company recen

Question

The J.T. Traverse Company is well known for its Traverse pens. The company recently reported the following amounts in its unadjusted trial balance as of December 31 Debits Credits Acoounts Receivable $32,191,000 Allowance for Doubtful S 955,000 159,812,000 Sales Revenue Required: 1. & Prepare the adjusting journal entry required at December 31 for 2. recording Bad Debt Expense (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) 0) Assume Traverse uses 14 of 1 percent of sales to estimate its bad debt expense for the year TIP: The percentage of credit sales method directly calculates Bad Debt Expense. (ii) Assume instead that Traverse uses the aging of accounts receivable method and estimates that S1,013,000 of Accounts Receivable will be uncollectble. TIP: The aging of accounts receivable method focuses on calculating what the adjusted Alowance for Doubtful Accounts balance should be. You need to consider the existing balance when determining the adjustment. View transaction list Journal entry worksheet Record the entry for bad debt expenses under the percentage of credit sales method. Note: Enter debits before credits. redit 12/3 Record entry View general journal Clear entry

Explanation / Answer

1 31-Dec Bad debts expense 399530 =159812000*0.25%         Allowance for Doubtful accounts 399530 2 31-Dec Bad debts expense 58000 =1013000-955000         Allowance for Doubtful accounts 58000 3 31-Dec Bad debts expense 1023350 =1013000+10350         Allowance for Doubtful accounts 1023350 4 Allowance for Doubtful accounts 10000          Accounts Receivable 10000

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