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Journalize Adjusting Entries

The ledger of Salizar Company at the end of the current year shows Accounts Receivable $110,000, Sales $840,000, and Sales Returns and Allowances $40,000.

Instructions

(a) If Allowance for Doubtful Accounts has a credit balance of $2,500 in the trial balance, journalize the adjusting entry at December 31, assuming bad debts are expected to be (1) 1% of net sales, and (2) 10% of accounts receivable.

(b) If Allowance for Doubtful Accounts has a debit balance of $500 in the trial balance, journalize the adjusting entry at December 31, assuming bad debts are expected to be (1) 0.75% of net sales and (2) 6% of accounts receivable.

Solution Preview

Hello,
In the books of Salizar Company Journal entries
DATE PARTICULARS DEBIT CREDIT

a.1 Bad debt expense(1% of 840000) 8400
Allowance for doubtful ...

Solution Summary

Solution contains journal entries to record allowance for doubtful debts.

$2.19