Question - The ledger of Sheridan Company at the end of the current year shows Accounts Receivable $84,500; Credit Sales $756,230; and Sales Returns and Allowances $37,220.
(a) If Sheridan Company uses the direct write-off method to account for uncollectible accounts, journalize the adjusting entry at December 31, assuming Sheridan Company determines that Matisse's $893 balance is uncollectible.
(b) If Allowance for Doubtful Accounts has a credit balance of $1,107 in the trial balance, journalize the adjusting entry at December 31, assuming bad debts are expected to be 10% of accounts receivable.
(c) If Allowance for Doubtful Accounts has a debit balance of $480 in the trial balance, journalize the adjusting entry at December 31, assuming bad debts are expected to be 8% of accounts receivable.