Gregg company uses the allowance method for recording its expected credit losses. It estimates credit losses at 3% of credit sales, which were $900,000 during the year. On December 31 the accounts receivable balance was 150,000, and the allowance for doubtful accounts had a credit balance of 12,200 before adjustment.A. Prepare the adjusting entry to record the credit losses for the year. B. Show how accounts receivable and the allowance for doubtful accounts would appear in the December 31 balance sheet. The top 2 shaded blanks have the options of Bad debts expense, allowance for doubtful accounts. The bottom 2 shaded blanks have the options of accounts receivable, less: allowance for doubtful accounts. Credit Losses Based on Credit SalesGregg Company uses the allowance method for recording its expected credit losses. It estimates credit losses at three percent of credit sales, which were $900,000 during the year. OnDecember 31, the Accounts Receivable balance was $150,000, and the Allowance for Doubtful Accounts had a credit balance of $12,200 before adjustment.a. Prepare the adjusting entry to record the credit losses for the year.b. Show how Accounts Receivable and the Allowance for Doubtful Accounts would appear in the December 31 balance sheet.a.General JournalDescriptionDebitDateDec.31Credit0++0To record allowance for credit losses.Ab. (Do not use negative signs with your answers)Current Assets:5000

Adjusting entries: Adjusting entries are those journal entries that are passed at the end of the…

Answered: Gregg company uses the allowance method…

College Accounting, Chapters 1-27

23rd Edition

ISBN:9781337794756

Author:HEINTZ, James A.

Publisher:HEINTZ, James A.

Chapter16: Accounting For Accounts Receivable

Section: Chapter Questions

Problem 9SPA: UNCOLLECTIBLE ACCOUNTSPERCENTAGE OF SALES AND PERCENTAGE OF RECEIVABLES At the completion of the...

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Gregg company uses the allowance method for recording its expected credit losses. It estimates credit losses at 3% of credit sales, which were $900,000 during the year. On December 31 the accounts receivable balance was 150,000, and the allowance for doubtful accounts had a credit balance of 12,200 before adjustment. A. Prepare the adjusting entry to record the credit losses for the year. B. Show how accounts receivable and the allowance for doubtful accounts would appear in the December 31 balance sheet. The top 2 shaded blanks have the options of Bad debts expense, allowance for doubtful accounts. The bottom 2 shaded blanks have the options of accounts receivable, less: allowance for doubtful accounts.

Credit Losses Based on Credit Sales
Gregg Company uses the allowance method for recording its expected credit losses. It estimates credit losses at three percent of credit sales, which were $900,000 during the year. On
December 31, the Accounts Receivable balance was $150,000, and the Allowance for Doubtful Accounts had a credit balance of $12,200 before adjustment.
a. Prepare the adjusting entry to record the credit losses for the year.
b. Show how Accounts Receivable and the Allowance for Doubtful Accounts would appear in the December 31 balance sheet.
a.
General Journal
Description
Debit
Date
Dec.31
Credit
0
+
+
0
To record allowance for credit losses.
A
b. (Do not use negative signs with your answers)
Current Assets:
50
0
0

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