The ledger of Wainwright Company at the end of the current year shows Accounts R

Question

The ledger of Wainwright Company at the end of the current year shows Accounts Receivable $82,000; Credit Sales $876,000; and Sales Returns and Allowances $57,800. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) (a) If Wainwright uses the direct write-off method to account for uncollectible accounts, journalize the adjusting entry at December 31, assuming Wainwright determines that Hiller’s $1,200 balance is uncollectible. (b) If Allowance for Doubtful Accounts has a credit balance of $1,100 in the trial balance, journalize the adjusting entry at December 31, assuming bad debts are expected to be 12% of accounts receivable. (c) If Allowance for Doubtful Accounts has a debit balance of $950 in the trial balance, journalize the adjusting entry at December 31, assuming bad debts are expected to be 9% of accounts receivable.

Explanation / Answer

Wainwright Company

Adjusting Entries

Adjusting entry # Account Title Debit Credit $ $ a. Bad debt expense 1,200 Accounts receivable 1,200 b. Bad debt expense 8,740 Allowance for doubtful accounts 8,740 c. Bad debt expense 8,330 Allowance for doubtful accounts 8,330

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