Reference no: EM132756222
Question: Lincoln Company which estimates that its annual bad debts approximate 4% of credit sales had the following balances at December 31, 2020 year-end prior to recording adjusting entries:
Total Sales (80% of which were sold on credit) $200,000cr
Accounts receivable 30,000dr
Allowance for doubtful accounts 100dr
Other information:
Write-offs for the year $ 3,200
Beginning accounts receivable balance (January 1, 2020) 26,000dr
a) Prepare the journal entry required to record sales for the year.
b) Prepare the journal entry to record Lincoln's bad debt expense. Calculate the net realizable value of the receivables on Lincoln's balance sheet at December 31, 2020.
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