On December 31, 2019, James Corpration has an Accounts Receivable balanced of $280,000 before any...
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Accounting
On December 31, 2019, James Corpration has an Accounts Receivable balanced of $280,000 before any adjustments. The Allowance for bad debts has a normal balance of $1,200. The company prepared the following aging schedule:
A) Determine the required addition to the allowance for bad debts and record in the first set of T accounts.
B) Record a write-off of $2,500 and determine the new balance in the allowance account in the first set of T accounts.
C) In the second set of T accounts, record the needed addition to the allowance if the beginning balance were $(2,300). You do not have to record the $2,500 write off.
D) In the third set of T accounts, record the addition to the allowance for bad debts if the company used the percentage of sales method. Sales for 2019 were 600,000 and past experience indicates that 1% of net sales will be uncollectible.
