AT&T; 14:25 a uncc.instructure.com ecture Assignment mu Courses URCES Exercise 8

Question

AT&T; 14:25 a uncc.instructure.com ecture Assignment mu Courses URCES Exercise 8-4 The ledger of Sunland Company at the end of the current year shows Accounts Receivable $76,600; Credit Sales $762,400; and Sales Returns and Allowances $42,520. If Sunland Company uses the direct write-off method to account for uncollectible accounts, journalize the adjusting entry at December 31, assuming Sunland Company determines that Matisse's $963 balance If Allowance for Doubtful Accounts has a credit balance of $1,179 in the trial balance, journalize the adjusting entry at December 31, assuming bad debts are expected to be 11% of accounts receivable. t If Allowance for Doubtful Accounts has a debit balance of $550 in the trial balance, journalize the adjusting entry at December 31, assuming bad debts are expected to be 8% of accounts receivable. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) (40 Ik-

Explanation / Answer

Solution: Following is the required journal entries:

Notes:(b)( 76,600*11% ) - 1,179 = $7,247

(c) (76,600*8%) + 550 = $6,678

No. Particulars Amount ($) Debit Amount ($) Credit (a) Bad Debt Expense 963 Accounts Receivable 963 (b) Bad Debt Expense 7,247 Allowances for Doubtful Accounts 7,247 (c) Bad Debt Expense 6,678 Allowances for Doubtful Accounts 6,678

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