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22 April, 17:01

The ledger of Windsor, Inc. at the end of the current year shows Accounts Receivable $84,000; Credit Sales $830,000; and Sales Returns and Allowances $44,000. (a) If Windsor uses the direct write-off method to account for uncollectible accounts, journalize the adjusting entry at December 31, assuming Windsor determines that Matisse's $800 balance is uncollectible. (b) If Allowance for Doubtful Accounts has a credit balance of $1,450 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 $400 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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  1. 22 April, 19:00
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    The answer is given below;

    Explanation:

    a. Bad Debt Expense Dr.$800

    Account Receivable Cr.$800

    b. $84,000*11% = $9,240

    Credit balance in trail balance ($1,450)

    Total $7,790

    Bad Debt Expense Dr.$7,790

    Account Receivable Cr.$7,790

    C. Debit Balance $400

    84,000*9% = $7,560

    Total $7,960

    Bad Debt Expense Dr.$7,960

    Account Receivable Cr.$7,960
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