(Answered) Problem - at december 31 2008 the trial balance of

Accounting

Problem - At December 31, 2008, the trial balance of Worcester Company contained the following amounts before adjustment.

	Debits	Credits
Accounts receivable	$385,000
Allowance for doubtful accounts		$2,000
Sales		950,000

Based on the information given, which method of accounting for bad debts is Worcester Company using-the direct write-off method or the allowance method?

Prepare the adjusting entry at December 31, 2008, for bad debts expense under each of the following independent assumptions. (1) An aging schedule indicates that $11,750 of accounts receivable will be uncollectible. (2) The company estimates that 1% of sales will be uncollectible.

During the next month, January 2009, a $3,000 account receivable is written off as uncollectible. Prepare the journal entry to record the write-off.

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