Exercise 8-05
The ledger of Marin Inc. at the end of the current year shows
Accounts Receivable $86,000; Credit Sales $800,000; and Sales
Returns and Allowances $44,000.
(a)
If Marin uses the direct write-off
method to account for uncollectible accounts, journalize the
adjusting entry at December 31, assuming Marin determines that
Matisse’s $700 balance is uncollectible.
(b)
If Allowance for Doubtful Accounts
has a credit balance of $1,300 in the trial balance, journalize the
adjusting entry at December 31, assuming...