The ledger of Splish ASA at the end of the current year shows Accounts Receivable €128,500,...
The ledger of Splish ASA at the end of the current year shows Accounts Receivable €128,500, Sales Revenue €853,500, and Sales Returns and Allowances €30,900. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)
| (a) | If Splish uses the direct write-off method to account for uncollectible accounts, journalize the adjusting entry at December 31, assuming Splish determines that T. Thum’s €2,500 balance is uncollectible. | |
| (b) | If Allowance for Doubtful Accounts has a credit balance of €3,100 in the trial balance, journalize the adjusting entry at December 31, assuming bad debts are expected to be (1) 1% of net sales, and (2) 11% of accounts receivable. | |
| (c) | If Allowance for Doubtful Accounts has a debit balance of €250 in the trial balance, journalize the adjusting entry at December 31, assuming bad debts are expected to be (1) 3% of net sales and (2) 7% of accounts receivable. |
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Date |
Account Titles and Explanation |
Debit |
Credit |
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| (a) |
Dec. 31 |
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| (b) (1) |
Dec. 31 |
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| (2) |
Dec. 31 |
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| (c) (1) |
Dec. 31 |
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| (2) |
Dec. 31 |
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Homework Answers
| Splish brothers | ||
| Journal entries | ||
| Part A | ||
| Bad debt exp | 2500 | |
| Allowance for doubtful debts | 2500 | |
| Part B | ||
| Bad debt exp. ( 853500 - 30900 ) * 1% | 8226 | |
| Allowance for doubtful debts | 8226 | |
| Bad debt exp.[ ( 128500 * 11%) - 3100 ] | 11035 | |
| Allowance for doubtful debts | 11035 | |
| Part C | ||
| Bad debt exp. ( 853500 - 30900 ) * 3% | 24678 | |
| Allowance for doubtful debts | 24678 | |
| Bad debt exp.[ ( 128500 * 7 %) + 250 ] | 9245 | |
| Allowance for doubtful debts | 9245 | |
Add Answer to:
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Question 2
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Question 2
The ledger of Metlock ASA at the end of the current year shows
Accounts Receivable €127,800, Sales Revenue €845,200, and Sales
Returns and Allowances €36,200. (Credit account titles
are automatically indented when amount is entered. Do not indent
manually.)
(a)
If Metlock uses the direct write-off method to account for
uncollectible accounts, journalize the adjusting entry at December
31, assuming Metlock determines that T. Thum’s €2,200 balance is
uncollectible.
(b)
If Allowance for Doubtful Accounts has a credit...
The ledger of Larkspur, Inc. at the end of the current year shows Accounts Receivable $89,000; Credit Sales $830,000; and Sales Returns and Allowances $50,000 (a) If Larkspur uses the direct write-off method to account for uncollectible accounts, journalize the adjusting entry at December 31, assuming Larkspur determines that Matisse $700 balance is uncollectible (b) If Allowance for Doubtful Account has a credit balance of $1,400 in the trial balance, journalize the adjusting entry at December 31, assuming bad debts...
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