The J.T. Traverse Company is well known for its Traverse pens. The company recently reported the following amounts in its unadjusted trial balance as of December 31.
Debits: $26,191,000
Credits: $943,000
Accounts Receivable: $153,812,000
Allowance for Doubtful Accounts
Sales Revenue
Required:
1. Prepare the adjusting journal entry required at December 31 for recording Bad Debt Expense. (If no entry is required for a transaction/event, select No Journal Entry Required in the first account field.)
i) Assume Traverse uses 1% of sales to estimate its bad debt expense for the year. TIP: The percentage of credit sales method directly calculates Bad Debt Expense.
ii) Assume instead that Traverse uses the aging of accounts receivable method and estimates that $989,000 of Accounts Receivable will be uncollectible. TIP: The aging of accounts receivable method focuses on calculating what the adjusted Allowance for Doubtful Accounts balance should be. You need to consider the existing balance when determining the adjustment.
View transaction list
View general journal
Journal Entry Worksheet
Sales method:
Debits:
Credits:
December 31
Enter debits before credits
Clear entry
Record entry
Aging of accounts receivable method:
Debits:
Credits:
December 31
Delete
Credit
Enter debits before credits
Clear entry
If one of Traverse's main customers declared bankruptcy, what journal entry would be used to write off its $11,000 balance? (If no entry is required for a transaction/event, select No Journal Entry Required in the first account field.)
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Journal Entry Worksheet
Record the write-off of a $11,000 customer account, which is not collectible due to bankruptcy.
Transaction 1
Credit Journal
Debit
Credit
Enter debits before credits
Done
Clear entry
Record entry
