Nichols Company Uses the Percentage of Receivables Method for Recording

question 152

Short Answer

Nichols Company uses the percentage of receivables method for recording bad debts expense. The accounts receivable balance is $200,000 and credit sales are $1,000,000. Management estimates that 4% of accounts receivable will be uncollectible. What adjusting entry will Nichols Company make if the Allowance for Doubtful Accounts has a credit balance of $2,000 before adjustment?

Understand the concept of percentiles and their application in describing data distributions.

Recognize and differentiate terms and symbols specific to statistical analysis and their meaning.

Identify key figures and their contributions to psychology.

Understand the difference between basic and applied research in psychology.

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