In: Accounting
Rogalas foods inc, was formed in 2015 with the merger of Grouch mayer and tashamo corporation. the company reported the following rounded amounts for the year ended January 3, 2016
debit credit
Amount receivable 1070
allowance for doubtful accounts 32
sales ( assume all on credit ) 17800
requeried
1) Assume Rogala uses 1/2 of 1 percent of sales to estimate its bad debts expense for the year. Prepare the adjusting journal entry required for the year, assuming not bad debt expense has been recorded yet.
2) Assume instead Rogala uses the aging of account receivable method and estimates that 74 of its accounts receivable will be uncollectible. prepare the adjusting journal entry required at January 3,2016 for recording bad debt expense
3) Assume instead rogala's uses the aging of account receivable method and estimates that 74 of its accounts receivable will be uncollectible. prepaid the year-end adjusting journal entry for recording bad debt expense assuming rogalas unadjusted balance in allowance for doubtful accounts at January 3,2016 was a debit balance of 35
4) if one of Rogalas costumers declared bankruptcy, what journal entry will be used to write off its 20 balance
1.
Account Titles | Debit | Credit | |
Bad Debt Expense | $ 89 | =17800*0.5% | |
Allowance for Doubtful accounts | $ 89 |
2.
Account Titles | Debit | Credit | |
Bad Debt Expense | $ 42 | =74-32 | |
Allowance for Doubtful accounts | $ 42 |
3.
Account Titles | Debit | Credit | |
Bad Debt Expense | $ 109 | =74+35 | |
Allowance for Doubtful accounts | $ 109 |
4.
Account Titles | Debit | Credit |
Allowance for Doubtful accounts | $ 20 | |
Accounts Receivable | $ 20 |