Assume That This Company's Bad Debts Are Estimated and Recorded

question 165

Essay

Assume that this company's bad debts are estimated and recorded as 1.5% of credit sales.
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.Show how accounts receivable and the allowance for doubtful accounts would appear on the balance sheet after adjustment.
b.Prepare the entry to write off a $1,500 account receivable on January 1 of the next year.
c.Show how accounts receivable and the allowance for doubtful accounts would appear on the balance sheet immediately after writing off the account in part 2.

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Definitions:

Job Offer

A formal proposition of employment extended by an employer to a prospective employee, detailing the terms of employment.

Defamation of Character Lawsuit

legal action initiated because of false statements made that cause damage to someone's reputation.

Previous Employers

Organizations where an individual has worked prior to their current or prospective employment, often contacted for references or verification.

EEOC Lawsuit

Legal action initiated based on a complaint of discrimination (regarding race, gender, age, disability, etc.) filed with the Equal Employment Opportunity Commission.