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UNCOLLECTIBLE ACCOUNTS—PERCENTAGE OF SALES AND PERCENTAGE OF RECEIVABLES At the end of the current year, the accounts receivable account of Parker’s Nursery Supplies has a debit balance of $350,000. Credit sales are $2,300,000. Record the end-of-period adjusting entry on December 31, in general journal form, for the estimated uncollectible accounts. Assume the following independent conditions existed prior to the adjustment: 1. Allowance for Doubtful Accounts has a credit balance of $1,920. (a) The percentage of sales method is used and bad debt expense is estimated to be 1% of credit sales. (b) The percentage of receivables method is used and an analysis of the accounts produces an estimate of $24,560 in uncollectible accounts. 2. Allowance for Doubtful Accounts has a debit balance of $1,280. (a) The percentage of sales method is used and bad debt expense is estimated to be ¾ of 1% of credit sales. (b) The percentage of receivables method is used and an analysis of the accounts produces an estimate of $22,440 in uncollectible accounts.

BuyFind

College Accounting, Chapters 1-27

23rd Edition
HEINTZ + 1 other
Publisher: Cengage Learning,
ISBN: 9781337794756
BuyFind

College Accounting, Chapters 1-27

23rd Edition
HEINTZ + 1 other
Publisher: Cengage Learning,
ISBN: 9781337794756

Solutions

Chapter
Section
Chapter 16, Problem 5SEB
Textbook Problem

UNCOLLECTIBLE ACCOUNTS—PERCENTAGE OF SALES AND PERCENTAGE OF RECEIVABLES At the end of the current year, the accounts receivable account of Parker’s Nursery Supplies has a debit balance of $350,000. Credit sales are $2,300,000. Record the end-of-period adjusting entry on December 31, in general journal form, for the estimated uncollectible accounts. Assume the following independent conditions existed prior to the adjustment:

  1. 1. Allowance for Doubtful Accounts has a credit balance of $1,920.
    1. (a) The percentage of sales method is used and bad debt expense is estimated to be 1% of credit sales.
    2. (b) The percentage of receivables method is used and an analysis of the accounts produces an estimate of $24,560 in uncollectible accounts.
  2. 2. Allowance for Doubtful Accounts has a debit balance of $1,280.
    1. (a) The percentage of sales method is used and bad debt expense is estimated to be ¾ of 1% of credit sales.
    2. (b) The percentage of receivables method is used and an analysis of the accounts produces an estimate of $22,440 in uncollectible accounts.

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Chapter 16 Solutions

College Accounting, Chapters 1-27
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