ACC363-Week1 Answers

ACC363-Week1 Answers - ACC363 Week 1 Solutions EXERCISE 9-2...

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Unformatted text preview: ACC363 Week 1 Solutions EXERCISE 9-2 The ledger of Elburn Company at the end of the current year shows Accounts Receivable $110,000, Sales $840,000, and Sales Returns and Allowances $28,000. Instructions (a) If Elburn uses the direct write-off method to account for uncollectible accounts, journalize the adjusting entry at December 31, assuming Elburn determines that Copps $1,400 balance is uncollectible. (b) If Allowance for Doubtful Accounts has a credit balance of $2,100 in the trial balance, journalize the adjusting entry at December 31, assuming bad debts are expected to be (1) 1% of net sales, and (2) 10% of accounts receivable. (c) If Allowance for Doubtful Accounts has a debit balance of $200 in the trial balance, journalize the adjusting entry at December 31, assuming bad debts are expected to be (1) 0.75% of net sales and (2) 6% of accounts receivable. (a) (1) Dec. 31 Bad Debts Expense 1,400 Accounts ReceivableCopp 1,400 (b) (1) Dec. 31 Bad Debts Expense 8,120 [($840,000 $28,000) X 1%] Allowance for Doubtful Accounts 8,120 (2) Dec. 31 Bad Debts Expense 8,900 Allowance for Doubtful Accounts 8,900 [($110,000 X 10%) $2,100] (c) (1) Dec. 31 Bad Debts Expense 6,090 [($840,000 $28,000) X .75%] Allowance for Doubtful Accounts 6,090 (2) Dec. 31 Bad Debts Expense 6,800 Allowance for Doubtful Accounts 6,800 [($110,000 X 6%) + $200] PROBLEM 10-3A On January 1, 2006, Solomon Company purchased the following two machines...
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ACC363-Week1 Answers - ACC363 Week 1 Solutions EXERCISE 9-2...

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