Reference no: EM132609663

Question - The ledger of Nuro Company at the end of the current year shows Accounts Receivable $360,000, Sales Revenue $3,600,000, and Sales Returns and Allowances $120,000.

Instructions -

(a) If Nuro uses the direct write-off method to account for uncollectible accounts, journalize the adjusting entry at December 31, assuming Nuro determines that Willie's $5,000 balance is uncollectible.

(b) If Allowance for Doubtful Accounts has a credit balance of $5,800 in the trial balance, journalize the adjusting entry at December 31, assuming bad debts are expected to be 8% of accounts receivable.

(c) If Allowance for Doubtful Accounts has a debit balance of $1,500 in the trial balance, journalize the adjusting entry at December 31, assuming bad debts are expected to be 9% of accounts receivable.