the accounts have the following balaces D C acquiacoount receivable 100,000 allo

Question

    the accounts have the following balaces

                                                            D                    C

acquiacoount receivable                  100,000

allowance for doubtful accounts                                 2,500

sales                                                                        750000

sales return and allowances             40,000

1)prepare the journal entries for estimating bad debts assuming that the following separate assumptions are (!) 6% accounts receivable (2)1% of net sales

2)assume instead that the allowance has a debit balance instead of a credit balance. prepare the neceessary entries to record bad debts under each of the above assumptions

Explanation / Answer

1]a)6% of accounts recievable

Provision to be provided for = 6% of Accounts Recievable

= 6% of 100000

= $6000

Provision to be made = Provision to be provided

1]a)6% of accounts recievable

Provision to be provided for = 6% of Accounts Recievable

= 6% of 100000

= $6000

Provision to be made = Provision to be provided

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