Credit Losses Based on Percentage of Credit Sales Highland Company uses the allowance method of...
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Credit Losses Based on Percentage of Credit Sales Highland Company uses the allowance method of handling credit losses. It estimates losses at 3% of credit sales, which were $3,000,000 during the year. On December 31, the Accounts Receivable balance was $840,000, and the Allowance for Doubtful Accounts had a credit balance of $5,100 before adjustment a. Determine the amount of the adjustment to record credit losses for the year. Note: Use negative signs with answers, when appropriate Balance Sheet income statement Assets Liabilities. Stockholders' Equity Revenues Expenses - Net Income b. Show how the Accounts Receivable account and the Allowance for Doubtful Accounts would appear on the December 31 balance sheet Note: Do not use negative signs with any of your answers, Balance Sheet (excerpt) Current assets Carth S XXX 5 0 0 0 Inventory Other current assets Total Current Assets XOOXXOOX Xxx xoxo Check
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