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Please help with these 2 accounting questions?

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Please help with these 2 accounting questions?

Postby job47 » Wed Jun 27, 2012 2:16 pm

1) A company used the percent of sales method to determine its bad debts expense. At the end of the current year, the company's unadjusted trial balance reported the following selected amounts:

please look at this link for number
http://ezto.mhhm.mcgraw-hill.com/13252698224355810144.tp4?REQUEST=SHOWmedia&media=image018.png

All sales are made on credit. Based on past experience, the company estimates 1% of credit sales to be uncollectible. What adjusting entry should the company make at the end of the current year to record its estimated bad debts expense?
A)Debit Bad Debts Expense $19,750; credit Allowance for Doubtful Accounts $19,750.
B)Debit Bad Debts Expense $15,225; credit Allowance for Doubtful Accounts $15,225.
C)Debit Bad Debts Expense $22,250; credit Allowance for Doubtful Accounts $22,250.
D)Debit Bad Debts Expense $7,350; credit Allowance for Doubtful Accounts $7,350.
E)Debit Bad Debts Expense $21,000; credit Allowance for Doubtful Accounts $21,000.

2)A company uses the percent of receivables method to determine its bad debts expense. At the end of the current year, the company's unadjusted trial balance reported the following selected amounts:

its the same link as above for the numbers

All sales are made on credit. Based on past experience, the company estimates 3.5% of credit sales to be uncollectible. What adjusting entry should the company make at the end of the current year to record its estimated bad debts expense?
A)Debit Bad Debts Expense $13,975; credit Allowance for Doubtful Accounts $13,975.
B)Debit Bad Debts Expense $15,225; credit Allowance for Doubtful Accounts $15,225.
C)Debit Bad Debts Expense $16,475; credit Allowance for Doubtful Accounts $16,475.
D)Debit Bad Debts Expense $7,350; credit Allowance for Doubtful Accounts $7,350.
E)Debit Bad Debts Expense $17,350; credit Allowance for Doubtful Accounts $17,350.


Thanks
job47
 
Posts: 897
Joined: Tue Mar 22, 2011 11:15 pm

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