1. Business
  2. Accounting
  3. question 1 21 score recrdng and reporting allowance for doubtful...

Question: question 1 21 score recrdng and reporting allowance for doubtful...

Question details

Question 1 (21 score) Recrdng and Reporting Allowance for Doubtful Accounts Using the Percentage of Credit Sales and Aging of Accounts Receivable Methods Innovative Tech Inc. ITD us ses the percentage of credit sales method to estimate bad debts each November, ITI sold services on one percent of those sales would be uncollectible. I year-end, total Accounts Receivable is $89,000, aged as follows: (1) 1-30 $10,000; and (3) more than 90 days old, $4,000. month and then uses the aging method at year-end. During N account for $100,000 and estimated thath of At its December 3 days old, $75,000; (2) 31-90 days old, Experience has shown that for each age group, the average rate of u percent, (2) 20 is made, the Allowance for Doubtful Accounts has a $1,600 credit balance at Required: 1. Prepare the November adjusting entry for bad debts. percent, and (3) 40 percent, respectively. Before the end-of-year adjusting entry December 31. 2. Prepare a schedule to estimate an appropriate year-end balance for the Allowance for Doubtful Accounts. 3. Prepare the December 31 adjusting entry 4. Show how the various accounts related to accounts receivable should be shown on the December 31 balance sheet.
Solution by an expert tutor
Blurred Solution
This question has been solved
Subscribe to see this solution