Question

Required: 1. Prepare the adjusting entry for this company to recognize bad debts under each of the following independent assumptions. a. Bad debts are estimated to be 4% of credit sales b. Bad debts are estimated to be 3% of total sales c. An aging analysis estimates that 7% of year-end accounts receivable are uncollectible Adjusting entries (all dated December 31, 2015). (Round your final answers to the nearest whole dollar.) View transaction list View journal entry worksheet No Transaction Credit General Journal Bad debts expense Allowance for doubtful accounts Debit 140.640 140.640 145 594 Bad debts expense Allowance for doubtful accounts Bad debts expense Allowance for doubtful accounts

Answer 1

Assumed amounts in part 1 is correct since no other information is provided regarding sales and receivables amount.

2.

Current Assets:	Amount in $	Amount in $
Accounts Receivable	10,65,348
Less: Allowance for doubtful accounts	-1,40,640	9,24,708

3.

Current Assets:	Amount in $	Amount in $
Accounts Receivable	10,65,348
Less: Allowance for doubtful accounts	-88,494	9,76,854