value: 0.71 points M8-9 Recording Bad Debt Estimates Using the Two Estimation Me

Question

value: 0.71 points M8-9 Recording Bad Debt Estimates Using the Two Estimation Methods LO 8-2] Assume that Simple Co. had credit sales of $268,000 and cost of goods sold of $159,000 for the period. l estimates that 1 percent of credit sales in uncollectible accounts when it uses the percentage of credit sale method and it estimates that the appropriate ending balance in the Allowance for Doubtful Accounts is $3,800 when it uses the aging method. Before the end-of-period adjustment is made, the Allowance for Doubtful Accounts has a credit balance of $340 repare the journal entry to record the end-of-period adjustment for bad debts under the (a) percentage of credit sales method and (b) aging of accounts receivable method. (If no entry is required for a transaction/event, select " No Journal Entry Required" in the first account field.) Journal entry worksheet 2 Assume Simple Co. had credit sales of $268,000 and cost of qoods sold of

Explanation / Answer

a Bad debts expense 2680 =268000*1%        Allowance for Doubtful accounts 2680 b Bad debts expense 3460 =3800-340        Allowance for Doubtful accounts 3460

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