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The trial balance before adjustment of Company reports the following balances: Dr. Cr. Accounts...

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Accounting

The trial balance before adjustment of Company reports the following balances: Dr. Cr.

Accounts receivable $800,000 debit Allowance for doubtful accounts $ 6,000 credit Sales (all on credit) 1,440,000 credit Sales returns and allowances 75,000 debit

(a) Prepare the journal entry for estimated bad debts assuming that doubtful accounts are estimated to be 8% of gross accounts receivable. Show calculation as journal entry description.

(b) Prepare the journal entry for estimated bad debts assuming that doubtful accounts are estimated to be 8% of gross accounts receivable, but now the allowance for doubtful accounts is a $7,000 debit balance. Show calculation as journal entry description.

(c) Prepare the journal entry for estimated bad debts using the net credit sales method if 7% of net credit sales are assumed to become bad debt assuming the data above. Show calculation as journal entry description.

(d) Assume that all the information above is the same for (c), except that the Allowance for Doubtful Accounts has a debit balance of $5,000 instead of a credit balance. Show calculation as journal entry description.

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