Solution-Give the income statement presentation of bad debts

Give the income statement presentation of bad debts

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Reference no: EM132803914

The following are the selected account balances of El Mar Company taken from its trial balance as of December 31, 2006.

Accounts Receivable P125,000

Allowance for Bad Debts 6,500

Sales 1,125,000

Sales Returns & Allowances 16,000

Sales discount 25,500

Required:

Problem 1: Give the adjusting entry, the income statement presentation of bad debts and the balance sheet presentation for accounts receivable at its realizable value under each of the following methods of providing for bad debts:

1. Bad debts are estimated to be 1% of gross sales.

2. Bad debts are estimated to be ½% of net sales.

3. Increase the allowance by 2% of the accounts receivable.

4. The allowance for bad debts should be increased to 5% of accounts receivable.

5. The aging schedule showed that uncollectible accounts will amount of P7,500.

Reference no: EM132803914

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Give the income statement presentation of bad debts

Reference no: EM132803914

Reference no: EM132803914

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