Improved Technologies Has Estimated Bad Debts Using the Percentage-Of-Sales Method

question 1

Essay

Improved Technologies has estimated bad debts using the percentage-of-sales method since their business began operations in 2011.Information relating to bad debts and sales is as follows:

At the beginning of 2014,Improved proposes changing their estimation of bad debt expense from 3 percent of sales to 2.5 percent.Sales for the year totaled $186,000 and actual bad debts amounted to $3,910.
(1)Prepare the journal entry to record bad debt expense at the end of 2014.
(2)Determine the balance in "Allowance for Bad Debts" on December 31,2014.

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Definitions:

Need For Achievement

An individual's desire for significant accomplishment, mastering of skills, control, or high standards.

Need For Affiliation

A person's desire to build and maintain strong, positive relationships with others.

Need For Power

A personal drive to influence, control or have authority over others, as described in McClelland's theory of needs.

ERG Theory

A theory in psychology proposed by Clayton Alderfer that categorizes human needs into three categories: Existence, Relatedness, and Growth, and suggests that these needs can be pursued simultaneously.