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Jars Plus recorded $861,430 in credit sales for the year and $488,000 in accounts receivable. The uncollectible percentage is 2.3% for the income statement method, and 3.6% for the balance sheet method. A. Record the year-end adjusting entry for 2018 bad debt using the income statement method. B. Record the year-end adjusting entry for 2018 bad debt using the balance sheet method. C. Assume there was a previous debit balance in Allowance for Doubtful Accounts of $10,220, record the year-end entry for bad debt using the income statement method, and then the entry using the balance sheet method. D. Assume there was a previous credit balance in Allowance for Doubtful Accounts of $5,470, record the year-end entry for bad debt using the income statement method, and then the entry using the balance sheet method.

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Principles of Accounting Volume 1

19th Edition
OpenStax
Publisher: OpenStax College
ISBN: 9781947172685

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FindFindarrow_forward

Principles of Accounting Volume 1

19th Edition
OpenStax
Publisher: OpenStax College
ISBN: 9781947172685
Chapter 9, Problem 4PA
Textbook Problem
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Jars Plus recorded $861,430 in credit sales for the year and $488,000 in accounts receivable. The uncollectible percentage is 2.3% for the income statement method, and 3.6% for the balance sheet method.

A. Record the year-end adjusting entry for 2018 bad debt using the income statement method.

B. Record the year-end adjusting entry for 2018 bad debt using the balance sheet method.

C. Assume there was a previous debit balance in Allowance for Doubtful Accounts of $10,220, record the year-end entry for bad debt using the income statement method, and then the entry using the balance sheet method.

D. Assume there was a previous credit balance in Allowance for Doubtful Accounts of $5,470, record the year-end entry for bad debt using the income statement method, and then the entry using the balance sheet method.

To determine

(a)

To journalize:

The uncollectible percentage using the income statement method.

Introduction:

Journal entries record business transactions. These transactions have double effect on accounts such that total of all assets equate with liabilities and equities.

Explanation of Solution

Record bad debts:

Date Account Debit ($) Credit ($)
Dec. 31 Bad Debt Expense ($861,430×2.3%) 19,813
To determine

(b)

To journalize:

Uncollectible percentage using the balance sheet method.

To determine

(c)

To journalize:

Allowance for Doubtful Accounts using the income statement method and balance sheet method.

To determine

(d)

To journalize:

Allowance for Doubtful Accounts using the income statement methoda dn balance sheet method.

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Chapter 9 Solutions

Principles of Accounting Volume 1
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