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Bas_tet [7]
3 years ago
12

Credit Losses Based on Credit Sales Lewis Company uses the allowance method for recording its expected credit losses. It estimat

es credit losses at 5% of credit sales which were $900,000 during the year. On December 31, the Accounts Receivable balance was $150,000 and the Allowance for Doubtful Accounts had a credit balance of $20,200 before adjustment. a. Prepare the adjusting entry to record the credit losses for the year
Business
1 answer:
ASHA 777 [7]3 years ago
4 0

Answer:

Explanation:

The adjusting entry to record the credit losses is shown below:

Bad debt expense A/c Dr $45,000

       To Allowance for doubtful debts $45,000

(Being bad debt is recorded)

The credit loss computation is shown below:

= Credit sales × estimated percentage

= $900,000 × 5%

= $45,000

For recording this transaction, we debited the expense account and credited the contra asset account.

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Answer:

c. 70% / 81% / 90%

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What does it mean to freeze assets and bank accounts?
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Which statement of cash flow method would require the disclosure of the noncash transaction of acquiring a factory financed enti
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