Oscar Company uses the allowance method to account for bad debts. On December...
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Oscar Company uses the allowance method to account for bad debts. On December 31, 2020, the following information was available: Net Sales $4,820,000 Accounts Receivable $1,140,000 REQUIRED: 1. Give the December 31, 2020 adjusting entry required under the allowance method, assuming Case 1: Bad debts are estimated at 1% ofnet sales; the unadjusted balance of the Allowance for Bad Debts account is $8,700 credit. Case 2: Bad debts are estimated at 1% ofnet sales; the unadjusted balance of the Allowance for Bad Debts account is $7,500 debit. Case 3: Bad debts are estimated at 4% ofaccounts receivable the unadjusted balance of the Allowance for Bad Debts account is $8,700 credit. Case 4: Bad debts are estimated at 4% ofaccounts receivable the unadjusted balance of the Allowance for Bad Debts account is $7,500 debit. GENERAL JOURNAL Account Titles CR Case 1 Date DR Case 2 Case 3 Case 4 3. Based on your journal entries from Part A, indicate thdbalances that would be reported on the financial statements on December 31, 2020: On the Income On the Balance Statement: Sheet: Bad Debts Allowance for Cash Realizable Value Case Expense Bad Debts of Accounts Receivable 1 2 3
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