Question

Prepare entries to record allowance for doubtful accounts. The ledger of Macarty Company at the end of the current year shows Accounts Receivable $78,000, Credit Sales $810,000, and Sales Returns and Allowances $40,000. Instructions: If Macarty uses the direct write-off method to account for uncollectible accounts, journalize the adjusting entry at December 31, assuming Macarty determines that Matisse's $900 balance is uncollectible. If Allowance for Doubtful Accounts has a credit balance of $1,100 in the trial balance, journalize the adjusting entry at December 31, assuming bad debts are expected to be 10% of accounts receivable. If Allowance for Doubtful Accounts has a debit balance of $500 in the trial balance, journalize the adjusting entry at December 31, assuming bad debts are expected to be 8% of accounts receivable.

          Prepare entries to record allowance for doubtful accounts. The ledger of Macarty Company at the end of the current year shows Accounts Receivable $78,000, Credit Sales $810,000, and Sales Returns and Allowances $40,000.

Instructions:
If Macarty uses the direct write-off method to account for uncollectible accounts, journalize the adjusting entry at December 31, assuming Macarty determines that Matisse's $900 balance is uncollectible.

If Allowance for Doubtful Accounts has a credit balance of $1,100 in the trial balance, journalize the adjusting entry at December 31, assuming bad debts are expected to be 10% of accounts receivable.

If Allowance for Doubtful Accounts has a debit balance of $500 in the trial balance, journalize the adjusting entry at December 31, assuming bad debts are expected to be 8% of accounts receivable.

Added by Lauren M.

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