A Company Had the Following Items and Amounts in Its

question 15

Essay

A company had the following items and amounts in its unadjusted trial balance as of December 31 of the current year:
$\begin{array}{|l|l|r|}\hline & \text { Debit } & \text { Credit } \\\hline \text { Cash sales } & & \$ 88,000 \\\hline \text { Credit sales } & & 275,000 \\\hline \text { Accounts receivable } & \$ 96,000 & \\\hline \text { Allowance for doubtful accounts } & & 1,000 \\\hline\end{array}$
Prepare the adjusting entry to estimate bad debts under each of the following separate situations.
a.Bad debts are estimated to be 2.5% of credit sales.
b.An aging analysis estimates that 8% of the outstanding accounts receivable will be uncollectible.

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Definitions:

Audiation

The mental process of hearing or comprehending music in the mind without the actual physical presence of sound.

Musical Aptitude

The inherent ability or potential to learn music and musical concepts such as pitch and rhythm easily.

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The scholarly study of music, encompassing its history, theory, and cultural contexts.

Factor Analysis

A statistical method used to identify underlying relationships between various variables and group them into factors for easier interpretation.