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uncan Company reports the following financial information before adjustments. Dr

ID: 2416865 • Letter: U

Question

uncan Company reports the following financial information before adjustments.

Dr.

Cr.


Prepare the journal entry to record bad debt expense assuming Duncan Company estimates bad debts at (a) 2% of net sales and (b) 5% of accounts receivable. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.)

No.

Account Titles and Explanation

Debit

Credit

SHOW LIST OF ACCOUNTS

Dr.

Cr.

Accounts Receivable $155,900 Allowance for Doubtful Accounts $3,400 Sales Revenue (all on credit) 817,900 Sales Returns and Allowances 50,200

Explanation / Answer

Duncan company Details Amt $ Sales Revenue       817,900.00 Sales Return         (50,200.00) Net Sales         767,700.00 a Bad debt estimate @2% of net sales         15,354.00 Existing balance in Allowance for Doubtful accounts            3,400.00 Additional allowance required         11,954.00 b Accounts receivable balance       155,900.00 Bad debt estimate @5% of Accounts receivable balance            7,795.00 Existing balance in Allowance for Doubtful accounts            3,400.00 Additional allowance required            4,395.00 Journal Entry No Account Title Dr $ Cr $ a Bad Debt Expense         11,954.00 Allowance for Doubtful Accounts             11,954.00 b Bad Debt Expense            4,395.00 Allowance for Doubtful Accounts               4,395.00