Problem on unadjusted trial balance

Assignment Help Accounting Basics

Reference no: EM13159561

At December 31, 2009, Vizarro Company reports the following results for its calendar-year.

Cash sales . . . . . . . . . $2,184,700
Credit sales . . . . . . . . 3,720,000

In addition, its unadjusted trial balance includes the following items.

Accounts receivable . . . . . . . . . . . . . . . . . $1,127,500 debit

Allowance for doubtful accounts . . . . . . . . 29,030 debit

Required:

1. Prepare the adjusting entry for Vizarro Co. to recognize bad debts under each of the following independent assumptions.

a. Bad debts are estimated to be 1.5% of credit sales.
b. Bad debts are estimated to be 1% of total sales.
c. An aging analysis estimates that 3% of year-end accounts receivable are uncollectible.

2. Show how Accounts Receivable and the Allowance for Doubtful Accounts appear on its December31, 2009, balance sheet given the facts in part 1a.

3. Show how Accounts Receivable and the Allowance for Doubtful Accounts appear on its December31, 2009, balance sheet given the facts in part 1c.

Reference no: EM13159561

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