Question

At December 31, Folgeys Coffee Company reports the following results for its calendar year. Cash sales $ 912,000 Credit sales 312,000 Its year-end unadjusted trial balance includes the following items. Accounts receivable $ 137,000 debit Allowance for doubtful accounts 6,200 debit Prepare the adjusting entry to record bad debts expense assuming uncollectibles are estimated to be (1) 3% of credit sales, (2) 1% of total sales and (3) 6% of year-end accounts receivable.

B,Record Bad Debts Expense assuming uncollectibles are estimated to be 1% of total sales.

C, Record Bad Debts Expense assuming uncollectibles are estimated to be 6% of year-end accounts receivable.

Answer 1

A
Date	General Journal	Debit	Credit
Dec. 31	Bad debts expense	9360		=312000*3%
	Allowance for doubtful accounts		9360
B
Date	General Journal	Debit	Credit
Dec. 31	Bad debts expense	12240		=(912000+312000)*1%
	Allowance for doubtful accounts		12240
C
Date	General Journal	Debit	Credit
Dec. 31	Bad debts expense	14420		=(137000*6%)+6200
	Allowance for doubtful accounts		14420