Question

At year-end (December 31), Apple Company estimates its bad debts as 1.0% of its annual credit sales of $10,394,000. Apple records its Bad Debts Expense for that estimate. On the following March 1, Apple decides that the $1,650 account of M. Koncz is uncollectible and writes it off as a bad debt. On June 5, Koncz unexpectedly pays the amount previously written of 1. Prepare the journal entries for these transactions. Account Name Debit Credit Date At each calendar year-end, Reid Supply Co. uses the percent of accounts receivable method to estimate bad debts. On December 31, 2017, it has outstanding accounts receivable of $88,000, and it estimates that 1.5% will be uncollectible. 2. Prepare the adjusting entry to record bad debts expense for year 2017 under the assumption that the Allowance for Doubtful Accounts has: (a) a $1,000 credit balance before the adjustment (b) a $250 debit balance before the adjustment Date Account Name Debit Credit

Answer 1