Question

The ledger of Whispering Winds Corp. at the end of the current year shows Accounts Receivable $108,000; Sales Revenue $849,000; and Sales Returns and Allowances $24,500.

(a)		If Whispering Winds uses the direct write-off method to account for uncollectible accounts, journalize the adjusting entry at December 31, assuming Whispering Winds determines that L. Dole’s $1,700 balance is uncollectible.
(b)		If Allowance for Doubtful Accounts has a credit balance of $2,200 in the trial balance, journalize the adjusting entry at December 31, assuming bad debts are expected to be 14% of accounts receivable.
(c)		If Allowance for Doubtful Accounts has a debit balance of $211 in the trial balance, journalize the adjusting entry at December 31, assuming bad debts are expected to be 5% of accounts receivable. no. account title and explanation debit credit (a) bad debt expense allowance for doubtful accounts (b) bad debt expense allowance for doubtful accounts (C) bad debt expense allowance for doubtful accounts

Answer 1

a) Journal entry :

No	Account title and explanation	debit	credit
a	Bad debt expense	1700
	allowance for doubtful accounts		1700
	(To record bad debt expense)

b) Journal entry :

No	Account title and explanation	debit	credit
	Bad debt expense (108000*14%-2200)	12920
	allowance for doubtful accounts		12920
	(To record bad debt expense)

c) Journal entry :

No	Account title and explanation	debit	credit
	Bad debt expense (108000*5%+211)	5611
	allowance for doubtful accounts		5611
	(To record bad debt expense)