the ledger of concord corporation at the end of the current year shows accounts receivable $75,800; credit…

the ledger of concord corporation at the end of the current year shows accounts receivable $75,800; credit sales $818,100; and sales returns and allowances $39,600. (a) if concord corporation uses the direct write - off method to account for uncollectible accounts, journalize the adjusting entry at december 31, assuming concord corporation determines that matisses $812 balance is uncollectible. (b) if allowance for doubtful accounts has a credit balance of $1,060 in the trial balance, journalize the adjusting entry at december 31, assuming bad debts are expected to be 10% of accounts receivable. (c) if allowance for doubtful accounts has a debit balance of $530 in the trial balance, journalize the adjusting entry at december 31, assuming bad debts are expected to be 7% of accounts receivable. (credit account titles are automatically indented when amount is entered. do not indent manually.) no. account titles and explanation debit credit

the ledger of concord corporation at the end of the current year shows accounts receivable $75,800; credit sales $818,100; and sales returns and allowances $39,600. (a) if concord corporation uses the direct write - off method to account for uncollectible accounts, journalize the adjusting entry at december 31, assuming concord corporation determines that matisses $812 balance is uncollectible. (b) if allowance for doubtful accounts has a credit balance of $1,060 in the trial balance, journalize the adjusting entry at december 31, assuming bad debts are expected to be 10% of accounts receivable. (c) if allowance for doubtful accounts has a debit balance of $530 in the trial balance, journalize the adjusting entry at december 31, assuming bad debts are expected to be 7% of accounts receivable. (credit account titles are automatically indented when amount is entered. do not indent manually.) no. account titles and explanation debit credit

Answer

Explanation:

Step1: Determine bad - debt expense for direct write - off method

Under the direct write - off method, when an account is determined to be uncollectible, we directly write off the account. The bad - debt expense is equal to the uncollectible amount. Bad Debt Expense = $812

Step2: Journalize entry for direct write - off method

The journal entry is to debit Bad Debt Expense and credit Accounts Receivable - Matisse.

Account Titles and Explanation Debit Credit
Bad Debt Expense $812
Accounts Receivable - Matisse $812

Step3: Calculate required allowance for part (b)

Accounts Receivable = $75,800. Required allowance = 10% of Accounts Receivable = 0.10×$75,800 = $7,580 Existing credit balance in Allowance for Doubtful Accounts = $1,060 Bad Debt Expense = Required allowance - Existing credit balance = $7,580 - $1,060 = $6,520

Step4: Journalize entry for part (b)

Account Titles and Explanation Debit Credit
Bad Debt Expense $6,520
Allowance for Doubtful Accounts $6,520

Step5: Calculate required allowance for part (c)

Accounts Receivable = $75,800. Required allowance = 7% of Accounts Receivable = 0.07×$75,800 = $5,306 Existing debit balance in Allowance for Doubtful Accounts = $530 Bad Debt Expense = Required allowance+Existing debit balance = $5,306 + $530 = $5,836

Step6: Journalize entry for part (c)

Account Titles and Explanation Debit Credit
Bad Debt Expense $5,836
Allowance for Doubtful Accounts $5,836

Answer:

(a)

Account Titles and Explanation Debit Credit
Bad Debt Expense $812
Accounts Receivable - Matisse $812
(b)
Account Titles and Explanation Debit Credit
---- ---- ----
Bad Debt Expense $6,520
Allowance for Doubtful Accounts $6,520
(c)
Account Titles and Explanation Debit Credit
---- ---- ----
Bad Debt Expense $5,836
Allowance for Doubtful Accounts $5,836