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Funnel Direct recorded $1,345,780 in credit sales for the year and $695,455 in accounts receivable. The uncollectible percentage is 4.4% for the income statement method and 4% 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 credit balance in Allowance for Doubtful Accounts of $13,888; 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 6PA
Textbook Problem
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Funnel Direct recorded $1,345,780 in credit sales for the year and $695,455 in accounts receivable. The uncollectible percentage is 4.4% for the income statement method and 4% 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 credit balance in Allowance for Doubtful Accounts of $13,888; 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:

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 using income statement method:

Date Account Debit($) Credit($)
Dec. 31 Bad Debt Expense ($1,345,780×4
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.

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Chapter 9 Solutions

Principles of Accounting Volume 1
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