The following account balances are those of Music Land Supply Company as of December 31, the end of the fiscal year, before adjustments.
Required:
Prepare the necessary adjusting entry to record Bad Debt Expense in each of the following independent cases.
a.
Uncollectible accounts are estimated at 1.5% of credit sales.
b.
An aging of the accounts receivable indicates that $6,850 will not be collected.
c.
Assume the same facts in (b), except that the balance in Allowance for Bad Debts is a $420 debit before the adjustment.
d.
Assume the same facts as in (a), except that the balance in Allowance for Bad Debts is a $350 debit before the adjustment.

Question

The following account balances are those of Music Land Supply Company as of December 31, the end of the fiscal year, before adjustments.  ​
Required:
Prepare the necessary adjusting entry to record Bad Debt Expense in each of the following independent cases. 
a.
Uncollectible accounts are estimated at 1.5% of credit sales.
b.
An aging of the accounts receivable indicates that $6,850 will not be collected.
c.
Assume the same facts in (b), except that the balance in Allowance for Bad Debts is a $420 debit before the adjustment.
d.
Assume the same facts as in (a), except that the balance in Allowance for Bad Debts is a $350 debit before the adjustment.

Quizplus · Accepted Answer

The Answer of The following account balances are those of Music Land Supply Company as of December 31, the end of the fiscal year, before adjustments.  ​
Required:
Prepare the necessary adjusting entry to record Bad Debt Expense in each of the following independent cases. 
a.
Uncollectible accounts are estimated at 1.5% of credit sales.
b.
An aging of the accounts receivable indicates that $6,850 will not be collected.
c.
Assume the same facts in (b), except that the balance in Allowance for Bad Debts is a $420 debit before the adjustment.
d.
Assume the same facts as in (a), except that the balance in Allowance for Bad Debts is a $350 debit before the adjustment.

The Following Account Balances Are Those of Music Land Supply