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The December 31, 2018 balance sheet of Jenson Company had Accounts Receivable of $450,000 and a...

  1. The December 31, 2018 balance sheet of Jenson Company had Accounts Receivable of $450,000 and a credit balance in Allowance for Doubtful Accounts of $33,000. During 2019, the following transactions occurred:

Sales on account $1,600,000

Sales returns and allowances, $75,000

Collections from customers, $1,450,000

Accounts written off $35,000

Previously written off accounts of $6,000 were collected

(a) Journalize the 2019 transactions. Disregard any impact on inventory.

(b)   If Jenson uses the percentage of sales basis to estimate bad debts expense and anticipates 2% of the 2019 net sales to be uncollectible, what is the adjusting entry at December 31, 2019?

(c)   If the Jenson uses the percentage of receivables basis to estimate bad debts expense and determines that uncollectible accounts are expected to be 4% of the 2019 year-end balance in accounts receivable, what is the adjusting entry at December 31, 2019? Use the T accounts forms provided below for your analysis.

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ekkarill92 answered 1 year ago
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