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Answer #1
a) Calculation of Bad debt expense
Accounts Receivable 150000
bad debt %age 4%
Bad debt Expense 6000
Journal Entry
Bad Debt Account Dr. 6000
     To Allowance for doubtfull accounts 6000
(being provision for allowance for bad debt created)
Net realizable Value of Bad debt immediately after Journal Entry
Accounts Recievable 150000
Less: Opening Allowance for doubtfull accounts -3750
Less: Allowance for doubtfull debt created in journal entry -6000
Net Realizable Value 140250
b) Sales 975000
Less: Sales Return -50000
Net Sales 925000
bad debt %age 1.2%
Bad debt Expense 11100
Journal entry
Bad Debt Account Dr. 11100
     To Allowance for doubtfull accounts 11100
(being provision for allowance for bad debt created)
c) Joyce Written off Journal entry
Allowances for bad debt A/c dr. 4000
     To Accounts Receivable 4000
(being uncollectible AR written off)
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