x +h.08 Homework (GRADED)ezto.mheducation.com/hm.tpxCChipman software recently reported the following amounts in its unadjusted trial balance at its year-end:CreditsDebits$2,300Accounts ReceivableAllowance for Doubtful AccountsSales (assume all on credit)40$37,000Required:1&2. Prepare the adjusting journal entry required for the year. (If no entry is required for atransaction/event, select "No Journal Entry Required" in the first account field. Round youranswers to nearest whole dollar amount.)() Assume Chipman uses 1/2 of 1 percent of sales to estimate its Bad Debt Expense for the year(ii) Assume instead that Chipman uses the aging of accounts receivable method and estimates that$73 of its Accounts Receivable will be uncollectible.View transaction listJournal entry worksheet2Record the adjusting entry for bad debts using percent credit sales method.Note: Enter debits before credits.CreditDebitGeneral JournalTransactions

Question
Asked Oct 20, 2019

Do part 1 and 2 journal entries 

x +
h.08 Homework (GRADED)
ezto.mheducation.com/hm.tpx
C
Chipman software recently reported the following amounts in its unadjusted trial balance at its year-end:
Credits
Debits
$2,300
Accounts Receivable
Allowance for Doubtful Accounts
Sales (assume all on credit)
40
$
37,000
Required:
1&2. Prepare the adjusting journal entry required for the year. (If no entry is required for a
transaction/event, select "No Journal Entry Required" in the first account field. Round your
answers to nearest whole dollar amount.)
() Assume Chipman uses 1/2 of 1 percent of sales to estimate its Bad Debt Expense for the year
(ii) Assume instead that Chipman uses the aging of accounts receivable method and estimates that
$73 of its Accounts Receivable will be uncollectible.
View transaction list
Journal entry worksheet
2
Record the adjusting entry for bad debts using percent credit sales method.
Note: Enter debits before credits.
Credit
Debit
General Journal
Transaction
s
help_outline

Image Transcriptionclose

x + h.08 Homework (GRADED) ezto.mheducation.com/hm.tpx C Chipman software recently reported the following amounts in its unadjusted trial balance at its year-end: Credits Debits $2,300 Accounts Receivable Allowance for Doubtful Accounts Sales (assume all on credit) 40 $ 37,000 Required: 1&2. Prepare the adjusting journal entry required for the year. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field. Round your answers to nearest whole dollar amount.) () Assume Chipman uses 1/2 of 1 percent of sales to estimate its Bad Debt Expense for the year (ii) Assume instead that Chipman uses the aging of accounts receivable method and estimates that $73 of its Accounts Receivable will be uncollectible. View transaction list Journal entry worksheet 2 Record the adjusting entry for bad debts using percent credit sales method. Note: Enter debits before credits. Credit Debit General Journal Transaction s

fullscreen
check_circleExpert Solution
Step 1

In case of a credit sale, the customer is given an option to make payment for the sale within a specified time period and not immediately. It is a competitive market practice and increases the sale value. Such customers are assets to the company and known as Accounts Receivable. A loss in accounts receivable i.e. Bad debt is incurred when the customer does not pay the full amount due by him. It is not possible to ascertain such losses in advance, an estimate of doubtful debt based on the aging schedule is prepared and loss is recognized at the earliest.

Step 2

Computation of Estimated Bad Debt

Case 1
Sales $37,000
Bad Debt Expense 0.5% of Credit Sales
Bad Debt Expense 37000*0.5% = $185
Case 2:
Estimate that Bad debt Expense is $73
help_outline

Image Transcriptionclose

Case 1 Sales $37,000 Bad Debt Expense 0.5% of Credit Sales Bad Debt Expense 37000*0.5% = $185 Case 2: Estimate that Bad debt Expense is $73

fullscreen
Step 3

Journal Entry i...

Journal entry in the books of Chipman Software
Date Particulars
Bad Debt Expense A/c
To Allowance for Doubtful Debt A/c
(Being, Adjustment entry passed)
Ref Debit Credit
145
Dr
145
Note: Bad Debt Expenses Estimated Bad Debt - Unadjusted Allowance
-185-40
= $145
help_outline

Image Transcriptionclose

Journal entry in the books of Chipman Software Date Particulars Bad Debt Expense A/c To Allowance for Doubtful Debt A/c (Being, Adjustment entry passed) Ref Debit Credit 145 Dr 145 Note: Bad Debt Expenses Estimated Bad Debt - Unadjusted Allowance -185-40 = $145

fullscreen

Want to see the full answer?

See Solution

Check out a sample Q&A here.

Want to see this answer and more?

Solutions are written by subject experts who are available 24/7. Questions are typically answered within 1 hour*

See Solution
*Response times may vary by subject and question
Tagged in

Business

Accounting

Related Accounting Q&A

Find answers to questions asked by student like you

Show more Q&A add
question_answer

Q: For the past several years, Jolene Upton has operated a part-time consulting business from her home....

A: Since we have to answer only 3 subparts, we will answer the first three parts of this question. Plea...

question_answer

Q: Question 18 View Policies Current Attempt in Progress E-Flix rents DVDS that are mailed out to custo...

A: Meaning of Applied Overhead:Applied overhead is the amount of overhead cost that has been applied to...

question_answer

Q: Individual Retirement Accounts (LO 5.3) Phil and Linda are 25-year-old newlyweds and file a joint ta...

A: IRA- Abbreviation of IRA is Individual Retirement Account which is used as an investing tool that ha...

question_answer

Q: It costs Homer's Manufacturing $0.75 to produce baseballs and Homer sells them for $7 a piece. Homer...

A: Working note:

question_answer

Q: Linda installed a special pool for the hydrotherapeutic treatment of severe arthritis, as prescribed...

A: IRS Publication 502 states about medical and insurance deductions. It lists down what expenses can b...

question_answer

Q: Which is true of FedGlobalSM ACH Payments offered by Federal Reserve Bank Services?   A fixed-to-f...

A: FedGlobal ACH payments are done in 4 ways. It offers a wide range of efficient cross border payments...

question_answer

Q: What role does the audit trail play in terms of configaration?

A: Audit trail is a series of documents, files or other evidence of accounting transaction which are ex...

question_answer

Q: If sales are $815,000, variable costs are 73% of sales, and operating income is $260,000, what is th...

A: We will answer the first question since the exact one wasn’t specified. Please submit a new question...

question_answer

Q: At year-end (December 31), Chan Company estimates its bad debts as 0.5% of its annual credit sales o...

A: Bad debts are the measure of that amount of money that the organization neglects to get as a portion...