The ledger of Costello Company at the end of the current year shows Accounts Rec
ID: 2585236 • Letter: T
Question
The ledger of Costello Company at the end of the current year shows Accounts Receivable $132,000, Sales Revenue $859,000, and Sales Returns and Allowances $31,000.
If Allowance for Doubtful Accounts has a credit balance of $3,000 in the trial balance, journalize the adjusting entry at December 31, assuming bad debts are expected to be (1) 3% of net sales, and (2) 12% of accounts receivable. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)
No.
Date
Account Titles and Explanation
Debit
Credit
Dec. 31
Dec. 31
Menge Company has accounts receivable of $115,800 at March 31. Credit terms are 2/10, n/30. At March 31, Allowance for Doubtful Accounts has a credit balance of $1,500 prior to adjustment. The company uses the percentage-of-receivables basis for estimating uncollectible accounts. The company's estimate of bad debts is shown below.
Age of Accounts
Balance,
March 31
Estimated Percentage
Uncollectible
Prepare the adjusting entry at March 31 to record bad debt expense. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)
Date
Account Titles and Explanation
Debit
Credit
Mar. 31
No.
Date
Account Titles and Explanation
Debit
Credit
(1)Dec. 31
(2)Dec. 31
Menge Company has accounts receivable of $115,800 at March 31. Credit terms are 2/10, n/30. At March 31, Allowance for Doubtful Accounts has a credit balance of $1,500 prior to adjustment. The company uses the percentage-of-receivables basis for estimating uncollectible accounts. The company's estimate of bad debts is shown below.
Age of Accounts
Balance,
March 31
Estimated Percentage
Uncollectible
Prepare the adjusting entry at March 31 to record bad debt expense. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)
Date
Account Titles and Explanation
Debit
Credit
Mar. 31
Explanation / Answer
No. Date Account Titles and Explanation Debit Credit 1 31-Dec Bad debts expense 24840 Allowance for doubtful debts 24840 (859000-31000)*3% 31-Dec Bad debts expense 12840 Allowance for doubtful debts 12840 132000*12% -3000 2 Menge Company Current 1-30 days 31-90 days Over 90 days Balance At march 31 75700 22200 9100 8800 Estomaated % Uncollectible 4 5 20 55 Estomaated $ Uncollectible 3028 1110 1820 4840 Total Estimate Uncollectiable 10798 Existing Balance 1500 Desired Balance 9298 Bad debts expense 9298 Allowance for doubtful debts 9298
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