Please refer to this link in regards Innovative Tech Inc. (ITI) uses the percent

Question

Please refer to this link in regards

Innovative Tech Inc. (ITI) uses the percentage of credit sales method to estimate bad debts each month and then uses the aging method at year-end. During November, ITI sold services on account for $130,000 and estimated that 1/2 of one percent of those sales would be uncollectible. At its December 31 year-end, total Accounts Receivable is $99,900, aged as follows: (1) 1-30 days old, $84,000; (2) 31-90 days old, $11,000; and (3) more than 90 days old, $4,900. Experience has shown that for each age group, the average rate of uncollectibility is (1) 10 percent, (2) 20 percent, and (3) 40 percent, respectively. Before the end-of-year adjusting entry is made, the Allowance for Doubtful Accounts has a $2,050 credit balance at December 31. Required 1. Prepare the November adjusting entry for bad debts. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) View transaction list Journal entry worksheet Record the adjusting entry for bad debts as of November 30 Note: Enter debits before credits. Date General Journal Debit Credit Nov 30 Record entry Clear entry View general journal

Explanation / Answer

1.

2.

3.

4.

Date Account Title Debit Credit Nov.30 Bad debt expense 650 Allowance for doubtful accounts 650 (Bad debts provided @1/2% of $130,000 )

Related Questions

Navigate

• Browse (All)
• Browse P
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.