E8-3 The ledger of Hixson Company
at the end of the current year shows Accounts Receivable $120,000, Sales
$840,000, and Sales Returns and Allowances $30,000.
Instructions
(a) If Hixson uses the direct write-off method to account for uncollectible accounts, journalize
the adjusting entry at December 31, assuming Hixson determines that Fell’s $1,400 balance is
uncollectible.
(b) If Allowance for Doubtful Accounts has a credit balance of $2,100 in the trial balance, journalize the adjusting entry at December 31, assuming bad debts are expected to be (1) 1% of
net sales, and (2) 10% of accounts receivable.
(a) If Hixson uses the direct write-off method to account for uncollectible accounts, journalize
the adjusting entry at December 31, assuming Hixson determines that Fell’s $1,400 balance is
uncollectible.
(b) If Allowance for Doubtful Accounts has a credit balance of $2,100 in the trial balance, journalize the adjusting entry at December 31, assuming bad debts are expected to be (1) 1% of
net sales, and (2) 10% of accounts receivable.
(c) If Allowance for Doubtful
Accounts has a debit balance of $200 in the trial balance, journalize the
adjusting entry at December 31, assuming bad debts are expected to be (1) 0.75%
of net sales and (2) 6% of accounts receivable.
TUTORIAL PREVIEW
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(a)
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Dec. 31
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Bad Debts Expense
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1,400
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Accounts Receivable—Fell
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1,400
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(b)
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(1)
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Dec. 31
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Bad Debts Expense
[($840,000 – $30,000) X 1%]
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8,100
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Attachment 1: E8-3 The ledger .doc PRICE: $4
