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E7-9.   (Computing Bad Debts and Preparing Journal Entries) (LO 3) The trial balance before adjustment of...

E7-9.  

(Computing Bad Debts and Preparing Journal Entries)

(LO 3) The trial balance before adjustment of Taylor Swift Inc. shows the following balances.

Dr.

Cr.

Accounts Receivable

$90,000

Allowance for Doubtful Accounts

  1,750

Sales Revenue (all on credit)

$680,000

Instructions

Give the entry for estimated bad debts assuming that the allowance is to provide for doubtful accounts on the basis of (a) 4% of gross accounts receivable and (b) 5% of gross accounts receivable and Allowance for Doubtful Accounts has a $1,700 credit balance.

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