Reference no: EM131746180

File 5Q.jpg is the main file. I also uploaded the chart of all possible accounts.

This question has two parts, which are here as well:

a) Assume Simple Co. had credit sales of $266,000 and cost of goods sold of $158,000 for the period. Simple uses the percentage of credit sales method and estimates that 2 percent of credit sales would result in uncollectible accounts. Before the end-of-period adjustment is made, the Allowance for Doubtful Accounts has a credit balance of $330. Record the transaction.

b) Assume Simple Co. had credit sales of $266,000 and cost of goods sold of $158,000 for the period. Simple uses the percentage of credit sales method and estimates that 2 percent of credit sales would result in uncollectible accounts. Before the end-of-period adjustment is made, the Allowance for Doubtful Accounts has a credit balance of $330. Record the transaction.

Assume that Simple Co. had credit sales of $266,000 and cost of goods sold of $158,000 for the period. Simple uses the aging method and estimates that the appropriate ending balance in the Allowance for Doubtful Accounts is $6,200. Before the end-of-period adjustment is made, the Allowance for Doubtful Accounts has a credit balance of $330. Record the transaction.