The ledger of Kingbird, Inc. at the end of the current year shows Accounts Receivable $77,000; Credit Sales $860,000; and Sales Returns and Allowances $38,000. (a) If Kingbird uses the direct write-off method to account for uncollectible accounts, journalize the adjusting entry at December 31, assuming Kingbird determines that Matisse's $900 balance is uncollectible. (b) If Allowance for Doubtful Accounts has a credit balance of $1,050 in the trial balance, journalize the adjusting entry at December 31, assuming bad debts are expected to be 11% of accounts receivable. (c) If Allowance for Doubtful Accounts has a debit balance of $500 in the trial balance, journalize the adjusting entry at December 31, assuming bad debts are expected to be 9% of accounts receivable.

Question

Paddington

Business

24 July, 15:04

The ledger of Kingbird, Inc. at the end of the current year shows Accounts Receivable $77,000; Credit Sales $860,000; and Sales Returns and Allowances $38,000. (a) If Kingbird uses the direct write-off method to account for uncollectible accounts, journalize the adjusting entry at December 31, assuming Kingbird determines that Matisse's $900 balance is uncollectible. (b) If Allowance for Doubtful Accounts has a credit balance of $1,050 in the trial balance, journalize the adjusting entry at December 31, assuming bad debts are expected to be 11% of accounts receivable. (c) If Allowance for Doubtful Accounts has a debit balance of $500 in the trial balance, journalize the adjusting entry at December 31, assuming bad debts are expected to be 9% of accounts receivable.

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Answers (1)

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Darwin Montoya · Answer 1

The journal entries are as follows

Explanation:

The journal entries are shown below:

a. Bad debt expense $900

To Account receivable $900

(Being the bad debt expense is recorded)

b. Bad debt expense $7,420

To Account receivable $7,420

(Being the bad debt expense is recorded)

The computation is shown below:

= $77,000 * 11% - $1,050

= $7,420

b. Bad debt expense $7,430

To Account receivable $7,430

(Being the bad debt expense is recorded)

The computation is shown below:

= $77,000 * 9% + $500

= $7,430