Question

The ledger of the Tortillo company at the end of the current year shows Accounts Receivable...

The ledger of the Tortillo company at the end of the current year shows Accounts Receivable of $110,000 and Sales of $700,000.

Journalize the adjusting entry for end of the period for each of the following independent scenarios:

a) If Allowance for Doubtful Accounts has a debit balance of $2,000 in the trial balance and bad debts are expected to be 6% of accounts receivable.

b) If Allowance for Doubtful Accounts has a credit balance of $2,200 in the trial balance and bad debts are expected to be 6% of accounts receivable.

c) If Allowance for Doubtful Accounts has a credit balance of $3,200 in the trial balance and bad debts are expected to be 1% of sales.

d) If Allowance for Doubtful Accounts has a debit balance of $2,400 in the trial balance and bad debts are expected to be 1% of sales.

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Homework Answers

Answer #1

Adjusting entry

No General Journal Debit Credit
a Bad debt expense (110000*6%+2000) 8600
Allowance for doubtful accounts 8600

Adjusting entry

No General Journal Debit Credit
b Bad debt expense (110000*6%-2200) 4400
Allowance for doubtful accounts 4400

Adjusting entry

No General Journal Debit Credit
c Bad debt expense (700000*1%) 7000
Allowance for doubtful accounts 7000

Adjusting entry

No General Journal Debit Credit
d Bad debt expense (700000*1%) 7000
Allowance for doubtful accounts 7000
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