Estimate of uncollectibles is determined

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Patagonia Corp.'s unadjusted trial balance included the following:

                                                                                         Debit Credit

Accounts receivable.................................................................. $140,000

Allowance for doubtful accounts........................................... $890

Sales............................................................................................. 425,000

Sales returns and allowances................................................. 10,000

Instructions

Question a) Prepare adjusting journal entries assuming that the estimate of uncollectibles is determined by using 4% of gross accounts receivable.

Question b) Prepare adjusting journal entries assuming that the estimate of uncollectibles is determined by using 1.5% of net sales.

Reference no: EM132532803

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