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Accounting

Here is information related to Virtual Corporation for 2013:

Total sales (90% are on credit) $2,000,000

Accounts receivable at December 31 500,000

Prepare the appropriate journal entries for the following cases:

a) What amount of bad debt expense will Virtual Corporation report if it estimates that the bad debt expense is .6% of credit sales?

b) Assume that Virtual Company decides to estimate its bad debt expense based on 4% of accounts receivable. What amount of bad debt expense will the company record if it has an Allowance for Doubtful Accounts credit balance of $4,000?

c) Assume the same facts in part (b), except that there is a $2,000 debit balance in Allowance for Doubtful Accounts. What amount of bad debt expense will Virtual record?

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M9955656

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