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Max Industries Changed Its Method of Accounting for Bad Debts

question 1

Essay

Max Industries changed its method of accounting for bad debts from the direct write-off method to the allowance method on January 1, 2009. The company's accountant determined that an appropriate allowance of $90,000 should be established. Ignore income taxes.
Required:
Prepare the journal entry to record the accounting change.


Definitions:

System Contains

Referring to the components, elements, or processes that are included within a defined system.

Average Number

A measure of central tendency calculated by summing all numbers in a set and then dividing by the count of those numbers.

Computing

The process or practice of utilizing computer technology to complete a task or solve a problem, involving both hardware and software components.

Customers

Individuals or businesses that purchase goods or services from a company.

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