Adjusting Timing of Sales

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• Company's strategy from the viewpoint of shareholders.

  Also the company's net cash flow can be smiithed by adjusting production plans to suit the timing of new projects.

• Journalize Transaction and Adjusting entries

  (b) If the company uses the percentage of sales basis to estimate bad debts expense and anticipates 2% of net sales to be uncollectible, what is the adjusting entry at December 31, 2004?

• Can any accounting step after a worksheet be skipped?

  The main reason is that the company does not have to wait until it journalizes and posts the adjusting and closing entries. Timing is key in the end of period reporting process.

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  Prepare the adjusting entry using the 1% of net sales approach. b. Prepare the adjusting entry using the 8% of gross accounts receivable approach.