Smart Art Is a New Establishment

question 67

Essay

Smart Art is a new establishment. During the first year, there were credit sales of $40,000 and collections of credit sales of $36,000. One account for $650 was written off. The company decided to use the percent-of-sales method to account for bad debts expense, and use a factor of 2% for their year-end adjustment of bad debts expense. Prepare the entry to record the bad debt expense.

---

Definitions:

Development

The process of growth, progress, or evolution, often referring to economic, social, psychological, or biological advancements.

Theories

Systematically organized knowledge applicable in a wide variety of circumstances, especially to explain the nature or behavior of a specific set of phenomena.

Discovered

The process of uncovering or finding something unknown or unrecognized.

Nature

The collective manifestations of the physical realm, encompassing flora, fauna, terrains, and various natural formations and outputs of the planet, in contrast to entities or constructs made by humans.