A company had credit sales of $5.0 million for the year andestimates their bad debts to be 1% of net credit sales. Theaccountant for the company is thinking about switching to the agingof accounts receivable method and after preparing the agingschedule, the estimate equals $48,000. Accounts receivable hasa $450,000 balance and the allowance for doubtful accounts has acredit balance of $3,000 prior to adjustment. show your work.
a. The journal entry to adjust the books whenthe net credit sales method is used to account for bad debts willbe: debit and credit?
b. The journal entry to record bad debts expense when theaging of accounts receivable method is used would be:?
c. What will be the ending balance in the allowance fordoubtful accounts after the accounts have been adjusted when thenet credit sales method was used?
d. What will be the ending balance in the allowance fordoubtful accounts after the accounts have been adjusted when theaging of accounts receivable method was used ?
e. What is the net realizable value of accounts receivableafter adjustment when the net credit sales method is used?
f. What is the net realizable value of accounts receivableafter adjustment when the aging of accounts receivable method isused?
g. A $2,000 customer account is written off after theadjusting entry has been made and the financial statements preparedunder the net credit sales method. What is the net realizablevalue of accounts receivable after the account is writtenoff?