A Company That Uses the Allowance Method to Account for Its

question 87

Essay

A company that uses the allowance method to account for its bad debts had credit sales of $740,000 in 2015,including a $720 sale to Arbor Corporation.On December 31,2015,the company estimated its bad debts at 1.5% of its credit sales.On June 1,2016,the company wrote off as uncollectible the $720 account of Arbor Corporation; and on December 21,2016,Arbor Corporation unexpectedly paid her account in full.
Required:
Prepare the necessary journal entries dated: (a)on December 31,2015,to reflect the estimate of Bad Debt Expense; (b)on June 1,2016,to write off the bad debt; and (c)on December 21,2016,to record the unexpected collection.

Assess the legality and enforceability of agreements surrounding morally questionable acts.

Understand the implications of privacy and data protection laws on cross-border data exchange.

Understand the components and formation of enforceable contracts, including offer, acceptance, and consideration.

Differentiate between various types of contracts and agreements, including leases, option contracts, and requirement contracts.

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Definitions:

Voluntary Deductions

Deductions from an employee's paycheck that the employee chooses to have withheld for benefits such as retirement plans, health insurance, and union dues.

Gross Pay

The total earnings of an employee for a payroll period.

FICA Taxes

Taxes required by the Federal Insurance Contributions Act, funding Social Security and Medicare, deducted from employees' paychecks and matched by employers.

Social Security

A government program providing economic assistance to persons with inadequate or no income, funded by taxes on workers and employers.