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Financial & Managerial Accounting 3rd Edition by Charles Horngren,Harrison, Walter,Suzanne Oliver
Edition 3ISBN: 978-0132962339Financial & Managerial Accounting 3rd Edition by Charles Horngren,Harrison, Walter,Suzanne Oliver
Edition 3ISBN: 978-0132962339 Exercise 50
Accounting for uncollectible accounts using the allowance method
This problem continues the Draper Consulting, Inc., situation from Problem 7-42 of Chapter 7. Draper reviewed the receivables list from the January transactions (from Chapter 6). Draper identified on February 15 that a customer was not going to pay his receivable of $200 from December 9. Draper uses the allowance method for receivables, estimating uncollectibles to be 5% of January credit sales.
Requirements
1. Journalize the entry to record and establish the allowance using the percentage method for January credit sales.
2. Journalize the entry to record the identification of the customer's bad debt.
This problem continues the Draper Consulting, Inc., situation from Problem 7-42 of Chapter 7. Draper reviewed the receivables list from the January transactions (from Chapter 6). Draper identified on February 15 that a customer was not going to pay his receivable of $200 from December 9. Draper uses the allowance method for receivables, estimating uncollectibles to be 5% of January credit sales.
Requirements
1. Journalize the entry to record and establish the allowance using the percentage method for January credit sales.
2. Journalize the entry to record the identification of the customer's bad debt.
Explanation
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Financial & Managerial Accounting 3rd Edition by Charles Horngren,Harrison, Walter,Suzanne Oliver
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