Question

The ledger of Wainwright Company at the end of the current yearshows Accounts Receivable $80,000; Credit Sales $817,000; and SalesReturns and Allowances $42,900. (Credit account titles areautomatically indented when amount is entered. Do not indentmanually.)

(a) If Wainwright uses the direct write-off method to accountfor uncollectible accounts, journalize the adjusting entry atDecember 31, assuming Wainwright determines that Hiller’s $1,200balance is uncollectible.

(b) If Allowance for Doubtful Accounts has a credit balance of$1,000 in the trial balance, journalize the adjusting entry atDecember 31, assuming bad debts are expected to be 11% of accountsreceivable.

(c) If Allowance for Doubtful Accounts has a debit balance of$590 in the trial balance, journalize the adjusting entry atDecember 31, assuming bad debts are expected to be 9% of accountsreceivable.