Wasson Corp Had the Following Items in Its Unadjusted Trial

question 29

Essay

Wasson Corp had the following items in its unadjusted trial balance at December 31:
$$\begin{array} { | l | r | r | } \hline & \text { Debit } & \text { Credit } \\\hline \text { Cash sales } & & \$ 77,000 \\\hline \text { Credit sales } & & 130,000 \\\hline \text { Accourts receivable } & \$ 56,000 & \\\hline \text { Allowance for doubtful } & & 500\\ \text { accounts } & & \\\hline\end{array}$$ Prepare the adjusting entry to estimate bad debts under each of the following independent situations. (Show all work.) (1) Bad debts are estimated to be 5% of credit sales. (2) An analysis shows that 6% of outstanding accounts receivable will not be collected.

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Definitions:

Newborn

An infant recently born, typically regarded as from birth to one month of age.

School-Age Child

A child in the age range typically associated with attending elementary and middle schools, generally considered to be between 6 and 12 years old.

Vision

The ability to see, which involves the processing of visual information by the eyes and brain.

Snellen Letter Chart

A chart commonly used by eye care professionals to measure visual acuity, featuring rows of letters that decrease in size.