Solution-What is the amount of the bad debts expense

What is the amount of the bad debts expense adjusting entry

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Q1. Craigmont uses the allowance method to account for uncollectible accounts. Its year-end unadjusted trial balance shows Accounts Receivable of $104,500, allowance for doubtful accounts of $665 (credit) and sales of $925,000. If uncollectible accounts are estimated to be 4% of accounts receivable, what is the amount of the bad debts expense adjusting entry?

A. $4,845

B. $4,180

C. $3,515

D. $3,700

E. $3,850.

Q2. Giorgio Italian Market bought $4,000 worth of merchandise from Food Suppliers and signed a 90-day, 6% promissory note for the $4,000. Food Supplier's journal entry to record the collection on the maturity date is: (Use 360 days a year.)

A. Debit Cash $4,060; credit Notes Receivable $4,060

B. Debit Notes Receivable $4,000; credit Cash $4,000

C. Debit Cash $4,000; debit Interest Receivable $60; credit Sales $4,060

D. Debit Notes Receivable $4,060; credit Sales $4,060

E. Debit Cash $4,060; credit Interest Revenue $60; credit Notes Receivable $4,000

Reference no: EM132514113

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What is the amount of the bad debts expense adjusting entry

Reference no: EM132514113

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