Please answer.
Credit Losses Based on Credit Sales Smith & Sons uses the allowance method of handling its credit losses. It estimates credit losses at one percent of credit sales, which were $20,000,000 during the year. On December 31, the Accounts Receivable balance was $1,300,000 and the Allowance for Doubtful Accounts had a credit balance of $200,400 before adjustment.
Prepare the adjusting entry to record the credit losses for the year.
Show how Accounts Receivable and the Allowance for Doubtful Accounts would appear in the December 31 balance sheet.
a.
| General Journal | |||
|---|---|---|---|
| Date | Description | Debit | Credit |
| Dec.31 | AnswerBad Debts ExpenseAllowance for Doubtful AccountsCorrect 1.00 points out of 1.00 |
AnswerCorrect 1.00 points out of 1.00 |
AnswerCorrect 1.00 points out of 1.00 |
| AnswerBad Debts ExpenseAllowance for Doubtful AccountsCorrect 1.00 points out of 1.00 |
AnswerCorrect 1.00 points out of 1.00 |
AnswerCorrect 1.00 points out of 1.00 |
|
| To record allowance for credit losses. | |||
b. (Do not use negative signs with your answers.)
| Current Assets: | ||
| AnswerAccounts ReceivableLess: Allowance for Doubtful AccountsCorrect 1.00 points out of 1.00 |
$AnswerCorrect 1.00 points out of 1.00 |
|
| AnswerAccounts ReceivableLess: Allowance for Doubtful AccountsCorrect 1.00 points out of 1.00 |
AnswerIncorrect 0.00 points out of 1.00 |
|
| $Answer |
