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At December 31, Folgeys Coffee Company reports the following results for its calendar year.
Cash sales . . . . . . . . . . . . $ 900,000
Credit sales . . . . . . . . . . . 300,000
Its year- end unadjusted trial balance includes the following items.
Accounts receivable . . . . . . . . . . . . . . . . . . . . . . $ 125,000 debit
Allowance for doubtful accounts . . . . . . . . . . . . 5,000 debit
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.
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