its first year of operations, Turning Leaves Furmiture Restoration earned net cr
ID: 2515080 • Letter: I
Question
its first year of operations, Turning Leaves Furmiture Restoration earned net credit sales of $304,000. Industry experience suggests that bad debts will amount to 1% of net credit sales At December 31, 2018, accounts receivable total S41.000 The company uses the allowance method to account for uncollectibles. Read the requirements Requirement 1. Jourmalize Turning's Bad Debts Expense using the percent-of-sales method. (Record debits first, then credits. Select the explanation on the last line of the journal entry table) Date Accounts and Explanation Debit Credit Dec 31 Requirement 2. Show how to report accounts receivable on the balance sheet at December 31 2018 Balance Sheet (Partial) Choose from any list or enter any number in the input fhelds and then continue to the next question Save for LaterExplanation / Answer
Answer-1
Bad Debts Expense = 1% × $304,000 = $3040
Adjusting Entry on December 31, 2018:
Bad Debts Expense
3040
Allowance for Doubtful Debts
3040
Answer-2
Current Assets:
Accounts Receivables
41000
Less: Allowances for Doubtful Debts
(3040)
Net Accounts Receivables
37960
Bad Debts Expense
3040
Allowance for Doubtful Debts
3040
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