E7-9 (Computing Bad Debts and Preparing Journal Entries) The trial balance before adjustment of Reba McIntyre Inc. shows the following balances.
Accounts Rec. $90,000 (DR.)
Allowance for Doubtful Accounts 1,750 (DR.)
Sales (all on credit) $680,000 (CR.)
Instructions: Given the entry for estimated bad debts assuming that the allowances is to provide for doubtful accounts on the basis of (a) 4% of gross accounts receivable and (b) 1% of net sales.
Click here for the solution: The trial balance before adjustment of Reba McIntyre Inc. shows the following balances
