Zeus Inc Recorded Credit Sales of $1,750,000 During 2015

question 26

Essay

Zeus Inc. recorded credit sales of $1,750,000 during 2015. At December 31, 2015, the company had a $250,000 debit balance in Accounts Receivable and a $3,000 credit balance in Allowance for Doubtful Accounts.
Required:
a. Prepare the necessary adjusting journal entry at December 31 to record the estimated bad debt expense, assuming that bad debts are estimated at 1% of credit sales.
b. Prepare the necessary adjusting journal entry at December 31 to record the estimated bad debt expense, assuming that bad debts are estimated at 8% of outstanding accounts receivable.
c. Assume that a customer whose $3,300 account had been written off earlier in the year now pays the balance owed in full. Prepare the journal entry, or entries, to record the collection of this customer's account.

---

Definitions:

Behavioral Approaches

Methods or interventions based on the principle that behavior is learned and can therefore be unlearned or modified through therapy or changes in environmental conditions.

Adherence

The extent to which a person’s behavior corresponds with agreed recommendations from a healthcare provider.

Educational Strategies

Techniques and methods employed to facilitate learning, including pedagogical approaches, technology integration, and instructional design.

Behavioral Strategies

Techniques used to modify behavior by adopting or reinforcing particular actions or habits.