Dean's Sprots Posters, Inc. had sales on account of $260,000 last year. Sales returns and allowances...
Dean's Sprots Posters, Inc. had sales on account of $260,000 last year. Sales returns and allowances were $1,200, and Sales discounts were $800. Accounts receivable balance at the end of hte year was $25,000. Pre-adjusted allowance for bad debts balance was $1,525. Prepare the journal entry to record bad debts for the year if Dean estimates its bad debts at 1% of net credit sales.
Homework Answers
| Sales | $ 260,000 |
| Less: Sales returns and allowances | $ (1,200) |
| Less: Sales discounts | $ (800) |
| Net credit sales | $ 258,000 |
| Baddebt expense ($258,000*1%) | $ 2,580 |
Journal entry
| Baddebt expenses | $ 2,580 | |
| Allowance for doubtful accounts | $ 2,580 | |
| (To record baddebt expenses) |
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Dean's Sprots Posters, Inc. had sales on account of $260,000
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