bio 101

E8-1A. Credit Losses Based on Credit Sales
(LO2)
a. General Journal
Date
Description
Debit
Credit
Dec. 31
Bad debts expense
9,000

Allowance for doubtful accounts

9,000

To record allowance for credit losses
(0.01 x $900,000 = $9,000).

b. Current Assets:
Accounts receivable $150,000
Less: Allowance for doubtful accounts 19,200 $130,800

E8-2A. Credit Losses Based on Accounts Receivables
(LO1, LO2)
a. General Journal
Date
Description
Debit
Credit
Dec. 31
Bad debts expense
2,930

Allowance for doubtful accounts

2,930

To record allowance for credit losses:

$90,000 x 1%
=
$ 900

20,000 x 2%
=
400

11,000 x 5%
=
550

6,000 x 10%
=
600

4,000 x 25%
=
1,000

3,450

Less: Balance before adjustment

520

$2,930

b. General Journal
Date
Description
Debit
Credit
Apr. 10
Allowance for doubtful accounts
425

Accounts receivable—Rose Company

425

To write off Rose Company's account.

E8-3A. Allowance Method versus Direct Write-Off Method
(LO6) Appendix
a. General Journal
Date
Description
Debit
Credit
Mar. 10
Allowance for doubtful accounts
900

Accounts receivable—Gates Company

900

To write off the Gates Company account.

Nov. 18
Accounts receivable—Gates Company
400

Allowance for doubtful accounts

400

To reinstate the Gates Company account.

18
Cash
400

Accounts receivable—Gates Company

400

To record remittance.

E8-9A. Credit Losses Based on Accounts Receivables
(LO1, LO2)
a. General Journal
Date
Description
Debit
Credit
Dec. 31
Bad debts expense
5,860

Allowance for doubtful accounts

5,860

To record allowance for credit losses:

$180,000 x 1%
=
$1,800

40,000 x 2%
=
800

22,000 x 5%
=
1,100

12,000 x 10%
=
1,200

8,000 x 25%
=
2,000

6,900

Less: Balance before