Problem - Scenario: Consider the following INDEPENDENT situations for Tommy Company
a. The Allowance for Uncollectible Accounts has a $1,200 credit balance prior to adjustment. Net credit sales during the year are $830,000 and 2% are estimated to be uncollectible. Accounts Receivable has a balance of $110,000 at the end of the year. The company uses the percent-of-sales method.
b. The Allowance for Uncollectible Accounts has a $900 credit balance prior to adjustment. Based on an aging schedule of accounts receivable prepared at the end of the year, $20,000 of accounts receivable are estimated to be uncollectible. Accounts Receivable has a balance of $104,000.
c. The Allowance for Uncollectible Accounts has a $16,300 debit balance prior to adjustment. Based on an aging schedule of accounts receivable prepared at the end of the year, $200,000 of accounts receivable are estimated to be uncollectible. Accounts Receivable has a balance of $958,000 at the end of the year.
d. The Allowance for Uncollectible Accounts has a $500 credit balance prior to adjustment. Net credit sales during the year are $900,000 and 1% are estimated to be uncollectible. Accounts Receivable has a balance of $825,000 at the end of the year. The company uses the percent-of-sales method
Prepare the adjusting journal entries for uncollectible accounts for each INDEPENDENT situation.