A company had the following items and amounts in its unadjusted trial balance as of December 31 of the current year:
$$\begin{array} { l l l }
&\text { Debit } & \text { Credit } \
\text { Cash sales } & & \$ 188,000\
\text { Credit sales } & & 275,000 \
\text { Accounts receivable } & \$ 76,000 &\
\text { Allowance for doubtful accounts } & &1,000 \

\end{array}$$

Prepare the adjusting entry to estimate bad debts assuming bad debts are estimated to be 2.5% of credit sales.

Question

A company had the following items and amounts in its unadjusted trial balance as of December 31 of the current year:
 $$\begin{array} { l l l } 
&\text { Debit } & \text { Credit } \
\text { Cash sales } & & \$ 188,000\
\text { Credit sales } & & 275,000  \
\text { Accounts receivable } & \$ 76,000 &\
\text { Allowance for doubtful accounts } & &1,000 \

\end{array}$$
 
Prepare the adjusting entry to estimate bad debts assuming bad debts are estimated to be 2.5% of credit sales.

Quizplus · Accepted Answer

The Answer of A company had the following items and amounts in its unadjusted trial balance as of December 31 of the current year:
 $$\begin{array} { l l l } 
&\text { Debit } & \text { Credit } \
\text { Cash sales } & & \$ 188,000\
\text { Credit sales } & & 275,000  \
\text { Accounts receivable } & \$ 76,000 &\
\text { Allowance for doubtful accounts } & &1,000 \

\end{array}$$
 
Prepare the adjusting entry to estimate bad debts assuming bad debts are estimated to be 2.5% of credit sales.

A Company Had the Following Items and Amounts in Its