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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:

Economic Development

The process by which a nation improves the economic, political, and social well-being of its people.

Shipbuilding

The construction of ships and other floating vessels, a critical industry for trade, transportation, and military purposes.

Ironworks Industry

The sector involved in the smelting of iron ore, casting, and the forging of iron and steel to produce various goods and structures.

Domination

A state of having power or control over something or someone, often in a manner that suppresses, marginalizes, or oppresses.

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