Doubtful Accounts of Elburn Company
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E9-2 The ledger of Elburn Company at the end of the current year shows Accounts Receivable
$110,000, Sales $840,000, and Sales Returns and Allowances $28,000.
Instructions
(a) If Elburn uses the direct write-off method to account for uncollectible accounts, journalize
the adjusting entry at December 31, assuming Elburn determines that Copp's $1,400 balance
is uncollectible.
(b) If Allowance for Doubtful Accounts has a credit balance of $2,100 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.
(c) If Allowance for Doubtful Accounts has a debit balance of $200 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.
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Solution Summary
The solution uses the direct write-off method to consider what accounts will be uncollectible for the Elburn Company.
Education
- BA, Ain Shams University, Cairo Egypt
- MBA, California State University, Sacramento
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