9. 4 pnts The ledger of the Portillo company at the end of the currentyear shows
ID: 2444532 • Letter: 9
Question
9.
4 pnts
The ledger of the Portillo company at the end of the currentyear shows Accounts Receivable of $150,000.
Instructions
a)
If Allowance for Doubtful Accounts has a credit balance of$3,000 in the trial balance and bad debts are expected to be 10% ofaccounts receivable, journalize the adjusting entry for end of theperiod. (Show all calculations.)
b)
If Allowance for Doubtful Accounts has a debit balance of $3,000in the trial balance and bad debts are expected to be 10% ofaccounts receivable, journalize the adjusting entry for end of theperiod. (Show all calculations.)
9.
4 pnts
The ledger of the Portillo company at the end of the currentyear shows Accounts Receivable of $150,000.
Instructions
a)
If Allowance for Doubtful Accounts has a credit balance of$3,000 in the trial balance and bad debts are expected to be 10% ofaccounts receivable, journalize the adjusting entry for end of theperiod. (Show all calculations.)
b)
If Allowance for Doubtful Accounts has a debit balance of $3,000in the trial balance and bad debts are expected to be 10% ofaccounts receivable, journalize the adjusting entry for end of theperiod. (Show all calculations.)
Explanation / Answer
a Balance in Accounts Receivables 150,000.00 Estimated Bad Debts 15,000.00 ( 150000*10% ) Credit Balance in Allowance for 3,000.00 doubtful debts Hence amount to be credited 12,000.00 b Balance in Accounts Receivables 150,000.00 Estimated Bad Debts 15,000.00 ( 150000*10% ) Debit Balance in Allowance for (3,000.00) doubtful debts Hence amount to be credited 18,000.00 Journal Entries a Bad Debt Expense 12,000.00 Allowance for Doubtful Debts 12,000.00 b Bad Debt Expense 18,000.00 Allowance for Doubtful Debts 18,000.00
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