Brasser Co

question 83

Essay

Brasser Co.started using the percentage of sales method to account for bad debts in 2018.In 2017,the company's first fiscal year,the company had used the direct write-off method because the amount of bad debts was judged to be immaterial.The following information relates to the company's sales and receivables.

Required:
a.Calculate the correct balance in the allowance for doubtful accounts (ADA)at the end of 2018.Remember to include the effect of the change in accounting policy on 2017 accounts.
b.Record the write-off entry for 2018 and the year-end adjusting entries for 2018 to adjust the ADA.(Ignore income tax effects)

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Definitions:

Minority-Owned Businesses

Businesses that are at least 51% owned, operated, and controlled on a daily basis by one or more (in combination) minority group members.

Big Businesses

Refers to large corporations or enterprises that have a significant impact on the economy through their operations, market influence, and financial power.

Service Innovation

The introduction of new or improved services to meet customer needs more effectively, often involving new technologies or business models.

Hispanic-Owned Businesses

Firms where the ownership is majorly held by individuals of Hispanic descent, often tracked for demographic and economic analysis.