[ed0623]

I really need help please to solve this problem. I really don't have an any idea yet regarding to this problem.

At dec. 31 2010 before the any adjustments:

* the total receivables at the year-end are 1,585,000.
* the allowance for doubtful accounts has credit balance of 22,325
* net credit sales is 2,100,000.

What would be the adjusting entries at dec. 31, 2010 assume each item independently.

1. It is the policy of the company to maintain an allowance of 3% og. The total receivables.
2. Aging shows that 30,250 of receivables are uncollectible.
3. It is the policy of the company to recognize uncollectible accounts at 1% of net credit sales.

[rehmanvohra]

I really need help please to solve this problem. I really don't have an any idea yet regarding to this problem.

at dec. 31 2010 before the any adjustments:

* the total receivables at the year-end are 1,585,000.
* the allowance for doubtful accounts has credit balance of 22,325
* net credit sales is 2,100,000.

What would be the adjusting entries at dec. 31, 2010 assume each item independently.

1. It is the policy of the company to maintain an allowance of 3% og. The total receivables.
2. Aging shows that 30,250 of receivables are uncollectible.
3. It is the policy of the company to recognize uncollectible accounts at 1% of net credit sales.

Answers:

1. desired balance in allowance account 47,750
Balance in allowance account 22,325
Increase needed 25,425

debit bad debts expense and credit allowance account by 25,425

2. Entry will be for the difference 30,250-22,235 = 8,015

3 Entry will be for 21,000. The ending balance in allowance account will now be 43,235