Solved

Tanning Company Uses the Percentage of Receivables Method for Recording

Question 38

Multiple Choice

Tanning Company uses the percentage of receivables method for recording bad debts expense. The accounts receivable balance is $300,000 and credit sales are $1,000,000. An aging of accounts receivable shows that 5% will be uncollectible. What adjusting entry will Tanning Company make if the Allowance for Bad Debts account has a credit balance of $2,000 before the adjustment?


A) Tanning Company uses the percentage of receivables method for recording bad debts expense. The accounts receivable balance is $300,000 and credit sales are $1,000,000. An aging of accounts receivable shows that 5% will be uncollectible. What adjusting entry will Tanning Company make if the Allowance for Bad Debts account has a credit balance of $2,000 before the adjustment? A) B) C) D)

B) Tanning Company uses the percentage of receivables method for recording bad debts expense. The accounts receivable balance is $300,000 and credit sales are $1,000,000. An aging of accounts receivable shows that 5% will be uncollectible. What adjusting entry will Tanning Company make if the Allowance for Bad Debts account has a credit balance of $2,000 before the adjustment? A) B) C) D)

C) Tanning Company uses the percentage of receivables method for recording bad debts expense. The accounts receivable balance is $300,000 and credit sales are $1,000,000. An aging of accounts receivable shows that 5% will be uncollectible. What adjusting entry will Tanning Company make if the Allowance for Bad Debts account has a credit balance of $2,000 before the adjustment? A) B) C) D)

D) Tanning Company uses the percentage of receivables method for recording bad debts expense. The accounts receivable balance is $300,000 and credit sales are $1,000,000. An aging of accounts receivable shows that 5% will be uncollectible. What adjusting entry will Tanning Company make if the Allowance for Bad Debts account has a credit balance of $2,000 before the adjustment? A) B) C) D)

Correct Answer:

verifed

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Related Questions

Q33: Aspen Corporation
Data for Aspen Corporation for

Q34: Collision Corporation
Data for Collision Corporation

Q35: During 2012, the accounts receivable turnover ratio

Q36: Aspen Corporation
Data for Aspen Corporation for

Q37: Union Corporation reported net credit sales of

Q39: Bolt Corporation
The following data concern Bolt

Q40: Profile Corporation
The following data concern

Q41: The following information is available for Elson

Q42: Max's Tire Center Company
Selected data from

Q43: The following information is available for Elson

Unlock this Answer For Free Now!

View this answer and more for free by performing one of the following actions

qr-code

Scan the QR code to install the App and get 2 free unlocks

upload documents

Unlock quizzes for free by uploading documents