ACC 01 Week 11 - Chapter 9 --- P9-3, P9-4, P9-5

Problem 9-3

On December 31, 2008, Hill Company’s records show the following results for the year:

Cash sales Credit sales

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

Accounts receivable Allowance for doubtful accounts

Required

 Prepare the adjusting entry for Hill Co. to recognize bad debts under each of the following independent assumptions: a. Bad debts are estimated to be of credit sales. b. Bad debts are estimated to be of total sales. c. An aging analysis suggests of accounts receivable at year-end

are uncollectible.

Show how Accounts Receivable and the Allowance for Doubtful Accounts appear on the December 31, 2008, balance sheet given the facts in part (1a).

Show how Accounts Receivable and the Allowance for Doubtful Accounts appear on the December 31, 2008, balance sheet given the facts in part (1c).

Check Bad debts expense: (1b) (1c)

debit credit

4.00% 2.10%

831,000$

99,750$ 98,495$

2,300,000$

1,225

1

2

3

2,450,000

12.00%