80.2K

Verified Solution

Link Copied!

The Allowance For Uncollectible Accounts account of Renella Company has a credit balance of $500 at the end of the current year before Adjusting Entries). Renella Company estimates that its Bad Debts Expense are ten percent (10%) of its Accounts Receivable Balance at the end of the year of $100,000. If Renella Company uses the Percentage of Receivable (Accounts Receivable) Method (Balance Sheet Approach) for estimating its Bad Debts Expense, the Joumal Entry (Adjusting Entry) required to record the appropriate expected amount of Accounts Receivable not to be collected is: Credit $10,000 Allowance For Uncollectible Accounts Debit (a) Bad Debts Expense $10,000 $10,500 $10,500 (b) Bad Debts Expense Allowance For Uncollectible Accounts (c) Bad Debts Expense S 500 Allowance For Uncollectible Accounts (d) Bad Debts Expense $ 9,500 Allowance For Uncollectible Accounts S 500 (d) R $ 9,500 Chestnut Company ("Seller") sold to Marotta Company ("Buyer") merchandise (Inventory) on account for $10,000. The terms of the sale were 2,10,n,30. The cost to Chestnut Company of the merchandise (Inventory) sold was $6,000. Both Chestnut Company and Marotta Company use the Perpetual Inventory System. The Journal Entry required by Chestnut Company ("Seller") to record the receipt of payment after the Discount Period of the merchandise (Inventory) is: Credit Debit $10,000 (a) Accounts Receivable Cash $10,000 (b) Cash Sales Discounts Accounts Receivable $ 9,800 200 $10,000 (c) Cash $ 9,800 Accounts Receivable $ 9,800 (d) Cash $10,000 Accounts Receivable $10,000

Answer & Explanation Solved by verified expert

See Answer