Prepare Journal Entries for the Following Independent Situations

question 56

Essay

Prepare journal entries for the following independent situations.
a)The allowance for doubtful accounts has a $525 debit balance prior to adjustment. An aging schedule prepared on December 31 reveals uncollectible accounts of $7,600.
b)The allowance for doubtful accounts has a $500 credit balance prior to adjustment. An aging schedule prepared on December 31 reveals uncollectible accounts of $7,800.
c)The allowance for doubtful accounts has a $700 credit balance prior to adjustment. Net credit sales during the year are $260,000 and 4% are estimated to be uncollectible.
d)The allowance for doubtful accounts has a $800 credit balance prior to adjustment. Net credit sales during the year are $270,000 and 3.5% are estimated to be uncollectible receivable.

---

Definitions:

Expense Allocation

The process of distributing costs among different departments, projects, or segments within an organization.

Direct Expenses

Expenses that can be directly traced to producing specific goods or services, such as raw materials and labor costs.

Cash Conversion Cycle

The length of time it takes for a company to convert its investments in inventory and other resources into cash flows from sales.

Working Capital

The difference between a company's current assets and current liabilities, measuring the short-term financial health and operational efficiency.