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krek1111 [17]
3 years ago
9

Assume that Simple Co. had credit sales of $250,000 and cost of goods sold of $150,000 for the period. It estimates that 1 perce

nt of credit sales in uncollectible accounts when it uses the percentage of credit sales method and it estimates that the appropriate ending balance in the Allowance for Doubtful Accounts is $3,000 when it uses the aging method. Before the end-of-period adjustment is made, the Allowance for Doubtful Accounts has a credit balance of $250. Prepare the journal entry to record the end-of-period adjustment for bad debts under the (a) percentage of credit sales method and (b) aging of accounts receivable method. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) 1. Assume Simple Co. had credit sales of $250,000 and cost of goods sold of $150,000 for the period. Simple uses the percentage of credit sales method and estimates that 1 percent of credit sales would result in uncollectible accounts. Before the end-of-period adjustment is made, the Allowance for Doubtful Accounts has a credit balance of $250. Record the transaction. 2. Assume that Simple Co. had credit sales of $250,000 and cost of goods sold of $150,000 for the period. Simple uses the aging method and estimates that the appropriate ending balance in the Allowance for Doubtful Accounts is $3,000. Before the end-of-period adjustment is made, the Allowance for Doubtful Accounts has a credit balance of $250. Record the transaction.
Business
1 answer:
Dahasolnce [82]3 years ago
8 0

Answer:

A. Debit: Bad Debt Expense 2,500

Credit: Allowance for Doubtful Accounts 2,500

250,000 x .01 = 2,500

B. Debit: Bad Debt Expense 2,750

Credit: Allowance for Doubtful Accounts 2,750

3,000 - 250 = 2,750

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The general ledger shows a balance of $ 66 comma 200 in the Merchandise Inventory account at the end of the period. The physical
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The adjusting entry includes a debit to Cost of Goods Sold and a credit to Merchandise Inventory for $3,200

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Btw I found this in a website

Hope this helps

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3 years ago
Read 2 more answers
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