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.

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Definitions:

French Émigrés

Refers to French individuals, especially nobility, who fled France during the French Revolution due to threats to their lives and status.

Philadelphia

A historic city in the United States, known for its significant role in American history, particularly during the Revolutionary War.

1790s

The decade from 1790 to 1799, notable for significant political and social changes globally, including the French Revolution.

War on Britain

is a broad term that could refer to various conflicts involving Britain, but without a specific context, it is too vague to accurately define.