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Sonbull [250]
3 years ago
8

Discount Mart utilizes the allowance method of accounting for uncollectible receivables.

Business
1 answer:
lara [203]3 years ago
6 0

Answer: See explanation

Explanation:

From the question, we are given the information that on December 12, the company receives a $540 check from Chad Thomas in settlement of Thomas's $1,280 outstanding accounts receivable, then the journal entry based on the above will be:

December 12:

Debit Cash $540

Debit Allowance for doubtful account $740

Credit Account receivable $1280

Note that the allowance for doubtful account was calculated as:

= Account receivable - Cash

= $1280 - $540

= $740

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