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During its first year of operations, Chocolate Passion earned net credit sales of $390,000. Industry...

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Accounting

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During its first year of operations, Chocolate Passion earned net credit sales of $390,000. Industry experience suggests that bad debts will amount to 1% of net credit sales. At December 31, 2024, accounts receivable total $38,000. The company uses the allowance method to account for uncollectibles. Read the requirements Requirement 1. Journalize Chocolate's Bad Debts Expense using the percent-of-sales method. (Record debits first, then credits. Select the explanation on the last line of the journal entry table) Date Accounts and Explanation Debit Credit Dec 31 Bad Debts Expense 3900 Allowance for Bad Debts 3900 Recorded bad debts expense for the period Requirement 2. Show how to report accounts receivable on the balance sheet at December 31, 2024 Balance Sheet (Partial): Current Assets Accounts Receivable Less: Allowance for Bad Debts

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