The following information is available for Fiesta Company: Credit sales during 20x 1 Allowance for...
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The following information is available for Fiesta Company: Credit sales during 20x 1 Allowance for doubtful accounts at December 31, 20x0 Accounts receivable deemed worthless and written off during 20x1 $150,000 1,450 1,800 In the past, Fiesta estimated its bad debt expense as 1% of the year's credit sales. As a result of a review of the aging of accounts receivable in early January 20x2, management has determined that an allowance for doubtful accounts of $1,600 is needed at December 31, 20x 1. The company has not made the year-end adjusting entry for the bad debt expense of the year 20x1. (Hint: the old estimate of 1% is no longer relevant.) Required: 1. What is the total amount that Fiesta should record as bad debt expense for the year ended December 31, 20x1? 2. Show the journal entries affecting the Allowance for doubtful accounts that Fiesta made during 20x1
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