Question

The ledger of Sheffield Corp. at the end of the current year shows Accounts Receivable $80,300; Credit Sales $769,390; and Sales Returns and Allowances $41,700.

(a)

 

If Sheffield Corp. uses the direct write-off method to account for uncollectible accounts, journalize the adjusting entry at December 31, assuming Sheffield Corp. determines that Matisse’s $820 balance is uncollectible.

(b)

 

If Allowance for Doubtful Accounts has a credit balance of $1,112 in the trial balance, journalize the adjusting entry at December 31, assuming bad debts are expected to be 11% of accounts receivable.

(c)

 

If Allowance for Doubtful Accounts has a debit balance of $450 in the trial balance, journalize the adjusting entry at December 31, assuming bad debts are expected to be 9% of accounts receivable.