At December 31, GreenTea Company reports the following results for its calendar-year.
Cash sales $1,200,000
Credit sales 900,000
Its year-end unadjusted trial balance includes the following items.
Accounts receivable $195,000 debit
Allowance for doubtful accounts 3,000 debit
Required:
a. Prepare the adjusting entry to record Bad Debts Expense
assuming uncollectibles are estimated to be 1.5% of credit sales.
b. Prepare the adjusting entry to record Bad Debts Expense
assuming uncollectibles are estimated to be 0.5% of total sales.
c. Prepare the adjusting entry to record Bad Debts Expense
assuming uncollectibles are estimated to be 6% of year-end accounts
receivable.
