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Splish Brothers Inc. uses the percentage-of-receivables basis to record bad debt expense and concludes that 2% of accounts receivable will become uncollectible. Accounts receivable are $497,000 at the end of the year, and the allowance for doubtful accounts has a credit balance of $3,000.
Problem 1: Prepare the adjusting journal entry to record bad debt expense for the year.
Financial Statement Analysis and Preparation
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T he focus of the report is to determine the extent to which you are comfortable relying on the financial statements as presented by management .
Computation of Free Cash Flow
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