1: The ledger of Montgomery Company at the end of the current year shows Accounts Receivable $78,000;Credit Sales $810,000; and Sales Returns and Allowances $40,000.
Instructions:
(b) if Allowance for Doubtful Accounts has a credit balance of $1100 in the trial balance, journalize the adjusting entry at Dec.31, assuming bad debts are expected to be 10% of Accounts Receivable.
(c).if Allowance for Doubtful Accounts has a debit balance of $500 in the trial balance, journalize the adjusting entry at Dec.31, assuming bad debts are expected to be 8% of accounts receivable.
2: on Dec.31,2011, when its Allowances for Doubtful Accounts had a debit balance of $1400,Nova Co.estimates that 9% of its accounts receivable balance of $90,000 will become uncollectible and records the necessary adjustment to the Allowance for Doubtful Accounts. On May 11,2012, Nova Co.determined that J.Rast's account was uncollectible and wrote off $1200. On June 12,2012, Rast paid the amount previously written off.
Instructions:
Prepare the journal entries on Dec.31,2011,May 11,2012, June 12,2012
3. on July 4, Kathi's Restaurant accepts a Visa card for a $250 dinner bill.Visa charges a 4% service fee.
Instructions: Prepare the entry on Kathi's books related to the transaction