Reference no: EM131793608

Question - The ledger of Molina Company at the end of the current year shows Accounts Receivable $92,400; Credit Sales $782,200; and Sales Returns and Allowances $40,500.

(a) If Molina uses the direct write-off method to account for uncollectible accounts, journalize the adjusting entry at December 31, assuming Molina determines that Banner's $1,700 balance is uncollectible.

Date Account/Description Debit Credit

Dec. 31 Bad debts expense ..........

Accounts receivable .........

(b) If Allowance for Doubtful Accounts has a credit balance of $1,050 in the trial balance, journalize the adjusting entry at December 31, assuming bad debts are expected to be 10% of accounts receivable.

Date Account/Description Debit Credit

Dec. 31 Bad debts expense .........

Allowance for doubtful accounts..........

(c) If Allowance for Doubtful Accounts has a debit balance of $500 in the trial balance, journalize the adjusting entry at December 31, assuming bad debts are expected to be 8% of accounts receivable.

Date Account/Description Debit Credit

Dec. 31 Bad debts expense ........

Allowance for doubtful accounts ..........