Prepare the Adjusting Journal Entry to Record the Estimate for Bad

question 30

Essay

Prepare the adjusting journal entry to record the estimate for bad debts assuming:
On December 31 of the current year,a company's unadjusted trial balance revealed the following: accounts receivable of $185,600; sales revenue of $1,280,000; (75% were on credit); and allowance for doubtful accounts of $1,600 (credit balance).
a.Bad debts expense is estimated to be 1.5% of credit sales.
b.6% of the accounts receivable balance is assumed to be uncollectible.

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Definitions:

Habenula

A paired structure located in the epithalamus of the brain, involved in regulating responses to pain, stress, sleep, and reward by linking the forebrain to the midbrain and associated with various neurotransmitter systems.

Pineal Body

A small endocrine gland in the brain that produces melatonin, a hormone that regulates sleep-wake cycles.

Epithalamus

A part of the diencephalon in the brain that includes the pineal gland and is involved in the regulation of sleep-wake cycles.

Diencephalon

A division of the brain located between the cerebral hemispheres and brainstem, comprising structures such as the thalamus and hypothalamus, essential for sensory and autonomic functions.