Capilano Company has a July 31 year-end. You have been provided with the following information for the year just ended:- Total sales revenue for the year was $930,000.- Cash sales represent 20% of total sales.- The accounts receivable balance at the beginning of the year was $102,000.- The accounts receivable balance at the end of the year was $162,000.- A review of the outstanding accounts receivable at the end of the year indicates that $8,100 should be written off.- The industry uses the allowance approach based on 4% of accounts receivable or 1% of credit sales.Prepare the necessary adjusting entry to record the bad debts expense assumingthat Capilano Company uses the direct write-off approach.

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The Answer of Capilano Company has a July 31 year-end. You have been provided with the following information for the year just ended:- Total sales revenue for the year was $930,000.- Cash sales represent 20% of total sales.- The accounts receivable balance at the beginning of the year was $102,000.- The accounts receivable balance at the end of the year was $162,000.- A review of the outstanding accounts receivable at the end of the year indicates that $8,100 should be written off.- The industry uses the allowance approach based on 4% of accounts receivable or 1% of credit sales.Prepare the necessary adjusting entry to record the bad debts expense assumingthat Capilano Company uses the direct write-off approach.

Capilano Company Has a July 31 Year-End