At each calendar year-end mazie supply co. uses the percent of account receivable method to estimate bad debits. On December31,2013 it has outstanding accounts receivable of 55000 and estimated that 2% will be uncollectible . prepare the adjusting entry to record bad credit expense for the year 2013 under the assumption that the Allowance for doubtful accounts has (a) a 415 credit balance before the adjustment and (b) a 291 debit balance before the adjustment.
Solution Summary
Your tutorial is attached showing how this method works and showing the computations (click in cells to see).
... Date Details Debit Credit Dec 31 Bad Debts Expense $2000 Accounts Receivable $2000 (To record Bad Debts expense by Allowance method as percentage of net sales). ...
... following transactions separately for (Direct write off (2) Allowance method (Percentage of sales and (3) Allowance method (Percentage of accounts receivable. ...
... basis, management estimates what percentage of receivables... analysis is often called aging the accounts receivable. This method normally results in the better ...
1. Determining account balance: percent of revenue allowance method of accounting for ... to Leslie's Floor Store sales on account and accounts receivable. ...
... approach is to begin with a percent of sales ... you rework your amounts with varying percentages, you will ... costs relating to revenue under the percentage of sales ...
... revenue while the percentage of receivables methods of calculating the allowance for doubtful accounts emphasized the valuation of the receivable valance at ...
...Percent of Sales Method Bad debt would be a percentage of the current Sales. ...Percent of Accounts Receivable Method When Allowance for Bad Debt ...
... In other words the allowance calculated with percentage of Account receivable method is increased or decreased by the debit or credit balance in the Allowance ...
