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QUESTION
Johnson Corporation's Unadjusted Trial Balance at year-end included the following accounts:
Johnson Corporation’s Unadjusted Trial Balance at year-end included the following accounts:
Sales (75% represent credit sales) Debit Credit $1,152,000
Accounts Receivable Debit $288,000 Credit
Allowance for Doubtful Accounts Debit Credit $2,184
Compute the uncollectible account expense, and make the appropriate journal entry, for the current year assuming the uncollectible account expense is determined as follows:
- a. Income statement approach, 1% of total sales.
- b. Income statement approach, 1.5% of credit sales.
- c. Balance sheet approach. The estimate based on an aging of accounts receivable is that an allowance of $12,000 would be appropriate.
