3 value: 6.00 points During 2014, Sun Electronics, Incorporated, recorded credit

Question

3 value: 6.00 points During 2014, Sun Electronics, Incorporated, recorded credit sales of $770,000. Based on prior experience, it estimates a 2 percent bad debt rate on credit sales. a. The appropriate bad debt expense adjustment was recorded for the year 2014. b. On December 31, 2014, an account receivable for $330 from a prior year was determined to be uncollectible and was written off. Using the following categories, select the effects of the above transactions. Usefor increase and for decrease and indicate the accounts affected and the amounts. Transaction Assets Liabilities Stockholders' Equity b.

Explanation / Answer

Effect of the above transactions is as shown below:

Assets Liabilities Stockholders’ Equity a. Account Receivable -15,400 Bad debt Expense -15,400 b. Account Receivable -330 Allowance for doubtful accounts -330

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