145. Prepare the adjusting journal entry to record the estimate for bad debts assuming:
On December 31, of the current year, a company's unadjusted trial balance revealed the following: Accounts receivable of $185,600; Sales Revenue of $1,280,000; (75% were on credit) and Allowance for Doubtful Accounts of $1,600 (credit balance).
1. 6% of the accounts receivable balance is assumed to be uncollectible.
2. Bad debts expense is estimated to be 1.5% of credit sales.
146. Assume that this company's bad debts are estimated and recorded as 1.5% of credit sales.
On December 31, of the current year, a company's unadjusted trial balance revealed the following: Accounts receivable of $185,600; Sales Revenue of $1,280,000; (75% were on credit) and Allowance for Doubtful Accounts of $1,600 (credit balance).
1. Show how Accounts Receivable and the Allowance for Doubtful Accounts would appear on the balance sheet after adjustment.
2. Prepare the entry to write off a $1,500 account receivable on January 1 of the next year.
3. Show how Accounts Receivable and the Allowance for Doubtful Accounts would appear on the balance sheet immediately after writing off the account in part 2.
147. Each December 31, Davis Company ages its accounts receivable to determine the amount of its adjustment for bad debts. At the end of the current year, management estimated that $16,900 of the accounts receivable balances would be uncollectible. The Allowance for Doubtful Accounts account had a debit balance of $3,200 before any year-end adjustment for bad debts. Prepare the adjusting journal entry that Davis Company should make on December 31, of the current year, to estimate bad debts expense.