Question - The ledger of Costello Company at the end of the current year shows Accounts Receivable $145,000, Sales Revenue $843,000, and Sales Returns and Allowances $31,000.
If Costello uses the direct write-off method to account for uncollectible accounts, journalize the adjusting entry at December 31, assuming Costello determines that L. Dole's $2,300 balance is uncollectible.
If Allowance for Doubtful Accounts has a credit balance of $2,900 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) 11% of accounts receivable.
If Allowance for Doubtful Accounts has a debit balance of $310 in the trial balance, journalize the adjusting entry at December 31, assuming bad debts are expected to be (1) 3% of net sales and (2) 7% of accounts receivable.