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 3% of credit sales. b. Bad debts are estimated to be 2% of total sales. c. An aging analysis estimates that 6% of year-end accounts receivable are uncollectible. Adjusting entries (all dated December 31, 2017). General Journal Credit No 1 Transaction a. Debit 110,910 Bad debts expense Allowance for doubtful accounts 110,910 Bad debts expense 100,750 Allowance for doubtful accounts 100,750 67,211 X Bad debts expense Allowance for doubtful accounts 67,211 %

Can someone help me fix the cells I missed in these two ledgers?

Answer 1

Solution:

Requirement 1:

No.	Transaction	General Journal	Debit	Credit
1	a	Bad Debts Expense	$                110,910
		Allowance for Doubtful Accounts		$         110,910
		(To record bad debts expense)
2	b.	Bad Debts Expense	$                100,750
		Allowance for Doubtful Accounts		$         100,750
		(To record bad debts expense)
3	c.	Bad Debts Expense (Note:1)	$                   85,291
		Allowance for Doubtful Accounts		$           85,291
		(To record bad debts expense)

Note:

1)

Allowance for Doubtful Accounts
Beg. Balance	$                      18,080
		Bad Debts ( Balancing Figure)	$                 85,291
		End Balance(1120191*6%)	$                 67,211

Requirement 2:

Balance Sheet as per part 1a)

Current Assets:
Accounts Receivables(Given)	$                1,120,191
Less: Allowance for Doubtful Accounts Accounts (Note:1)	$                   (92,830)	$ 1,027,361

Note:

1)

Allowance for Doubtful Accounts
Beg. Balance	$                      18,080
		Bad Debts(3697000*3/100)	$              110,910
		End Balance	$                 92,830