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Question - At December 31, Folgeys Coffee Company reports the following results for its calendar year.
Cash sales $900,000
Credit sales 300,000
Its year-end unadjusted trial balance includes the following items.
Accounts receivable $125,000 debit
Allowance for doubtful accounts 5,000 debit
Required - Prepare the adjusting entry to record bad debts expense assuming uncollectibles are estimated to be (1) 3% of credit sales, (2) 1% of total sales and (3) 6% of year-end accounts receivable.
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