19. Haven Company uses the percentage of sales method for recording bad debts ex

Question

19. Haven Company uses the percentage of sales method for recording bad debts expense. For the year, cash sales are $600,000 and credit sales are $2,200,000 Management estimates that l % is the sales percentage to use. What adjusting entry will Haven Company make to record the bad debts expense? a Bad Debts Expense b. Bad Debts Expense c. Bad Debts Expense d. Bad Debts Expense Allowance for Doubtful Accounts Allowance for Doubtful Accounts Accounts Receivable Accounts Receivable 28,000 22,000 22,000 28,000 28,000 22,000 22,000 28,000 o d

Explanation / Answer

Option B is correct

General Journal Debit Credit Bad Debt Expense($2,200,000 * 0.01) $22,000 Allowance for Doubtful Accounts $22,000

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