Question 2 (15 marks) Frederic Company had the following balance at 1 January 2019: Accounts...
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Question 2 (15 marks) Frederic Company had the following balance at 1 January 2019: Accounts Receivable $125,000 Allowance for Doubtful Accounts (credit) 5,800 The following transactions took place during 2019: 1. Credit sales were $1,400,000. 2. Cash collection on credit sales was $1,304,000. Credit customers had taken advantage of $21,000 worth of cash discounts offered. 3. Sales returns and allowances on credit sales were $26,000. 4. Bad debts written off amounted to $16,450. 5. Bad debt recoveries were $800. Required: (a) Prepare the appropriate journal entry for Frederic Company for each of the above transaction. Ignore journal narrations. (10 marks) (b) Frederic Company estimated that uncollectibles amounted to 8% of accounts receivables at the year end. Prepare adjusting journal entry to record bad debt expense on 31 December 2019. Show how the amount in the journal entry is/are found. Ignore journal narrations
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