The J.T. Traverse Company is well known for its Traverse pens. The company recen

Question

The J.T. Traverse Company is well known for its Traverse pens. The company recently reported the following amounts in its unadjusted trial balance as of December 31. Debits $ 32,191,000 Credits Accounts Receivable Allowance for Doubtful Accounts Sales Revenue $ 955,000 159,812,000 Required: 1. & 2. Prepare the adjusting journal entry required at December 31 for recording Bad Debt Expense. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) () Assume Traverse uses 1/4 of 1 percent of sales to estimate its bad debt expense for the year. TIP: The percentage of credit sales method directly calculates Bad Debt Expense.

Explanation / Answer

1 12/31 Bad debts expense 399530 =159812000*0.25%          Allowance for Doubtful accounts 399530 3 12/31 Bad debts expense 1023350 =1013000+10350          Allowance for Doubtful accounts 1023350 4 1 Allowance for Doubtful accounts 10000          Accounts Receivable 10000

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