Journal entries for estimated bad debts provision.
(Computing Bad Debts and Preparing Journal Entries) The trial balance before adjustment of Reba McIntrye Inc. shows the following balances.
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Dr.
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Cr.
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Accounts Receivable
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$90,000
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Allowance for Doubtful Accounts
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1,750
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Sales (all on credit)
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$680,000
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Instructions
Give the entry for estimated bad debts assuming that the allowance is to provide for doubtful accounts on the basis of (a) 4% gross accounts receivable and (b) 1% of net sales.