An inexperienced accountant made the following entries. In each case, the explanation to the entry...
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Accounting
An inexperienced accountant made the following entries. In each case, the explanation to the entry is correct. Assume that at 12/31, the correct balance of the Allowance account before adjustment is $-0-.
Dec.
17
Cash
6,600
Sales Discounts
132
Accounts Receivable
6,732
(To record collection of 12/4 sales of $6,600, terms 2/10, n/30)
27
Cash
1,100
Bad Debt Expense
1,100
(Collection of account previously written off as uncollectible under allowance method)
31
Bad Debt Expense
2,250
Allowance for Doubtful Accounts
2,250
(To recognize estimated uncollectibles based on 3% of accounts receivable of $750,000)
Prepare the correcting entries. Errors were identified at the end of the year.
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