Consider the Following INDEPENDENT Situations for Tommy Company

question 131

Essay

Consider the following INDEPENDENT situations for Tommy Company:
a. The Allowance for Uncollectible Accounts has a $1,200 credit balance prior to adjustment. Net credit sales during the year are $830,000 and 2% are estimated to be uncollectible. Accounts Receivable has a balance of $110,000 at the end of the year. The company uses the percent-of-sales method.
b. The Allowance for Uncollectible Accounts has a $900 credit balance prior to adjustment. Based on an aging schedule of accounts receivable prepared at the end of the year, $20,000 of accounts receivable are estimated to be uncollectible. Accounts Receivable has a balance of $104,000 at the end of the year.
c. The Allowance for Uncollectible Accounts has a $16,300 debit balance prior to adjustment. Based on an aging schedule of accounts receivable prepared at the end of the year, $200,000 of accounts receivable are estimated to be uncollectible. Accounts Receivable has a balance of $958,000 at the end of the year.
d. The Allowance for Uncollectible Accounts has a $500 credit balance prior to adjustment. Net credit sales during the year are $900,000 and 1% are estimated to be uncollectible. Accounts Receivable has a balance of $825,000 at the end of the year. The company uses the percent-of-sales method.
Required:
Prepare the adjusting journal entries for uncollectible accounts for each INDEPENDENT situation. Explanations are not required.

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Definitions:

Widowhood

The state or condition of having lost one's spouse through death, often implying a period of mourning and adjustment.

Adjusting

The process of adapting or becoming accustomed to new conditions, situations, or environments.

Financial Decline

A decrease in the value of an individual's, company's, or nation's financial wealth.

Widowed

The state of having lost one's spouse to death, which can affect an individual's social, emotional, and financial status.