CommunityC Safety Serve z NY D edugenwileyplus.com/edu ACCOUNTING III (Accountin

Question

CommunityC Safety Serve z NY D edugenwileyplus.com/edu ACCOUNTING III (Accounting 101 Kimmel, Accounting, be The percentage of recelivables approach to estimating bad debts expense is used by Hayes Company. On February 28, the firm had accounts receivable in the amount of 585,000 and Allowance for Doubcful Accounls had a credit balance of $370 before adjustment. Net credit sales for February amounted to $3,000,000. The credit manager edinated that ncelectiede accouts would nort to 5% of accounts receivalde. on March 10, an accords remable fem Mark Dole for S2.100·s determined to be uncollectible and written off. However, on March 31, Dole received an inheritance and immediately paid his past due account in full hep.. tte-urn·ertries made by waves corparty ndent manually) n the belo-dates: (Credit account titles are automatically indented when the amount is entered. Do not February 28 Harch 10 2 March 33 Ma eserved A version 4.24.3.3 0

Explanation / Answer

Journal entry Date Account titles & Explanations Debit Credit 28-Feb Bad debts expense 28880 allowance for doubtful accounts 28,880 (585,000*5%= 29250 ) (29,250-370) 10-Mar Allowance for Doubtful accounts 2,100 Account receivable 2,100 31-Mar Accounts receivable 2,100 Allowance for Doubtful accounts 2,100 cash 2,100 Account receivable 2,100 Balance of allowance for Doubtful accounts at March 31 29,250

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