com/flow/connect.hml Chapter 9-Homework Help Sa 7 Exercise 9-10 Estimating bad d

Question

com/flow/connect.hml Chapter 9-Homework Help Sa 7 Exercise 9-10 Estimating bad debts LO P3 At December 31, Folgeys Coffee Company reports the following results for its calendar year 907,0e 307,800 Its year-end unadjusted trial balance includes the following items 132,000 debit Allowance for douetful accounts uncollectites are estimeed to be (al 6% of credt saes.bat of Prepare the adjusting entry to record bad debts expense assuming total sales and 9% of year-end accounts receivable. Journal entry worksheet Record Bad Debts Expense assuming uncollectibles are estimated to b* e% of credt sales

Explanation / Answer

a. 6% of credit sales

Bad debts expense $18420

To allowance of doubtful accounts $18420

$307000 * 6% = $18420

b. 4% of total sales

Bad debts expense $48560

To allowance of doubtful accounts $48560

($907000 + $307000) * 4% = $48560

c. 9% of accounts receivable

Bad debts expense $17580

To allowance of doubtful accounts $17580

($5700 + ($132000*9%) = $17580.

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