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CHAPTER 13 ACCOUNTING 13-3. Assuming that in Exercise 13-2 the balance sheet approach is used, prepare a journaliz...


CHAPTER 13 ACCOUNTING 13-3. Assuming that in Exercise 13-2 the balance sheet approach is used, prepare a journalized adjustin
13-2. The following information is given: Sales Returns and Allowances Sales Accounts Receivable Dr. Cr. Dr. Cr. Dr. Cr. 500
CHAPTER 13 ACCOUNTING 13-3. Assuming that in Exercise 13-2 the balance sheet approach is used, prepare a journalized adjusting entry for Bad Debts Expense. Based on an Accounts Receivable, an $8,000 balance in the Allowance account will be needed to cover bad debts. aging of .hiah ncan an A 11.
13-2. The following information is given: Sales Returns and Allowances Sales Accounts Receivable Dr. Cr. Dr. Cr. Dr. Cr. 500 110,000 30,000 Allowance for Doubtful Accounts Sales Discount Dr. Cr. 9,500 Dr. Cr. 5,000 Journalize the adjusting entry on December 31, 20XX, for Bad Debts Expense, which is estimated to be 4% of net sales. The income statement approach is used.
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ANSWER = 13.3
JOURNAL ENTRIES ON DECEMBER 31
Date Account Title and explanation Debit Credit
Bad Debt Expenses $                     8,000
1      To Allowance for Doubtful Debts $                       8,000
(To Record the allowance for Doubtful Debts for the year End)
ANSWER = 13.2
CALCULATION OF BAD DEBT EXPENSES OF THE YEAR
Bad debt is estimated is 4% of net sales
Sales $               1,10,000
Less: Sales Return and allowances $                        500
Less: Sales Discount $                     9,500
Net Sales $               1,00,000
Bad Debt Expnese = 4% of $ 100,000 $                     4,000
JOURNAL ENTRIES ON DECEMBER 31
Date Account Title and explanation Debit Credit
Bad Debt Expenses $                     4,000
1      To Allowance for Doubtful Debts $                       4,000
(To Record the allowance for Doubtful Debts for the year End)
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