50.1K

Verified Solution

Link Copied!

Senior Company uses the percentage of sales basis to estimate bad debt expenses. During 2020 Senior Company had Sales Revenue of $630,000 and Sales Returns and Allowances of $30,000, 30% were credit sales. On December 31, 2020, the credit manager estimates that 2% of net credit sales will be uncollectible, and AFDA balance showed a debit balance of $4,000. On February 1, 2021, the company wrote-off $500 of a customer account. On June 1, 2021, the company collected $300 that was previously written off. The adjusting entry for the estimated uncollectible will include: Credit AFDA $8,400. Credit AFDA $3,600. Credit AFDA $12,400 Credit AFDA $7,600 None of the above The journal entry to record the write-off of uncollectible accounts on February 1, 2021 is: Debit AFDA $300 and credit Accounts Receivable $300. Debit AFDA $500 and credit Accounts Receivable $500. Debit Accounts Receivable $500 and credit AFDA $500. Debit Accounts Receivable $300 and credit AFDA $300. None of the above. The journal entry to record the recovery of the amounts written- off on June 1, 2021 will include: Debit AFDA $300 and credit Accounts Receivable $300 Debit AFDA $500 and credit Accounts Receivable $500 Debit Accounts Receivable 3300 and credit AFDA S300 Debit Accounts Receivable $500 and credit AFDA $500 None of the above

Answer & Explanation Solved by verified expert

See Answer