Reference no: EM132849937
Question - At December 31 of the current year, a company reported the following:
Total sales for the current year: RM780,000.00 includes RM160,000.00 in cash sales.
Accounts receivable balance at Dec. 31, current year: RM190,000.00.
Bad debts written off during the current year: RM6,800.00.
Balance of Allowance for Doubtful Accounts at January 1, current year: RM8,300.00.
Required - Prepare the necessary adjusting entries to record bad debts expense assuming this company's bad debts are estimated to equal:
(a) 1.5% of credit sales.
(b) 5% of accounts receivable.