The ledger of Sairu Company at the end of the current year shows Accounts Receivable $195,000, Sales Revenue $1,800,000, and Sales Returns and Allowances $60,000.
Instructions:
(a) If Sairu uses the direct write-off method to account for uncollectible accounts, journalize the adjusting entry at December 31, assuming Sairu determines that Mashfi's $2,500 balance is uncollectible.
(b) If Allowance for Doubtful Accounts has a credit balance of $3,500 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 $590 in the trial balance, journalize the adjusting entry at December 31, assuming bad debts are expected to be 7% of accounts receivable.
The ledger of Sairu Company at the end of the current year shows Accounts Receivable $195,000, Sales Revenue $1,800,000, and Sales Returns and Allowances $60,000.
Instructions:
(a) If Sairu uses the direct write-off method to account for uncollectible accounts, journalize the adjusting entry at December 31, assuming Sairu determines that Mashfi's $2,500 balance is uncollectible.
(b) If Allowance for Doubtful Accounts has a credit balance of $3,500 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 $590 in the trial balance, journalize the adjusting entry at December 31, assuming bad debts are expected to be 7% of accounts receivable.
