13-2. The following information is given: Sales Returns and Allowances Sales Accounts Receivable Dr. Cr. Dr. Cr. Dr. Cr. 500 110,000 30,000 Allowance for Doubtful Accounts Sales Discount Dr. Cr. 9,500 Dr. Cr. 5,000 Journalize the adjusting entry on December 31, 20XX, for Bad Debts Expense, which is estimated to be 4% of net sales. The income statement approach is used.
Homework Answers
| ANSWER = 13.3 | ||||
| JOURNAL ENTRIES ON DECEMBER 31 | ||||
| Date | Account Title and explanation | Debit | Credit | |
| Bad Debt Expenses | $ 8,000 | |||
| 1 | To Allowance for Doubtful Debts | $ 8,000 | ||
| (To Record the allowance for Doubtful Debts for the year End) | ||||
| ANSWER = 13.2 | ||||
| CALCULATION OF BAD DEBT EXPENSES OF THE YEAR | ||||
| Bad debt is estimated is 4% of net sales | ||||
| Sales | $ 1,10,000 | |||
| Less: Sales Return and allowances | $ 500 | |||
| Less: Sales Discount | $ 9,500 | |||
| Net Sales | $ 1,00,000 | |||
| Bad Debt Expnese = 4% of $ 100,000 | $ 4,000 | |||
| JOURNAL ENTRIES ON DECEMBER 31 | ||||
| Date | Account Title and explanation | Debit | Credit | |
| Bad Debt Expenses | $ 4,000 | |||
| 1 | To Allowance for Doubtful Debts | $ 4,000 | ||
| (To Record the allowance for Doubtful Debts for the year End) | ||||
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