Hey everyone my first post, i appreciate help for just this one tiny question i have would be alot!! I'm only having trouble doing part B.)
The following is information from the July 31, 2014 balance sheet of Schafer Merchandising:
Accounts Receivable 1,160,000
Less: Allowance for Doubtful Accounts 21,000
(a) During August, Schafer Merchandising recorded total sales of $1,040,000, all on credit. Collections during August were $600,000. Total receivables identified as being uncollectible and written off during August were $4,000. Schafer Merchandising estimated bad debts as 1% of net credit sales.
(b) During September, total sales of $800,000 were recorded, all on credit. Collections during the month were $880,000. Total receivables identified as being uncollectible and written off during September were $4,000. Schafer Merchandising changed its method of estimating bad debts to the balance sheet approach because the new accountant said it more accurately reflected uncollectible accounts. The resulting aging analysis determined total estimated uncollectible accounts on September 30, 2014 to be $26,000.
Record the end of month adjustments to record estimated bad debts. Enter the transaction letter as the description. Dates must be entered in the format dd/mmm (ie. 15/Jan).
This is the question, i know how to journalize the A.) which comes to $10400 bad debt expense (debit) and 10400 (Credit) for allowance return.
I just don't get how to calculate B.) I checked the answer and it came to $2600 bad debt expense but i don't know how to get that. Please anyone can help me il appreciate it. Thank you very much!
The following is information from the July 31, 2014 balance sheet of Schafer Merchandising:
Accounts Receivable 1,160,000
Less: Allowance for Doubtful Accounts 21,000
(a) During August, Schafer Merchandising recorded total sales of $1,040,000, all on credit. Collections during August were $600,000. Total receivables identified as being uncollectible and written off during August were $4,000. Schafer Merchandising estimated bad debts as 1% of net credit sales.
(b) During September, total sales of $800,000 were recorded, all on credit. Collections during the month were $880,000. Total receivables identified as being uncollectible and written off during September were $4,000. Schafer Merchandising changed its method of estimating bad debts to the balance sheet approach because the new accountant said it more accurately reflected uncollectible accounts. The resulting aging analysis determined total estimated uncollectible accounts on September 30, 2014 to be $26,000.
Record the end of month adjustments to record estimated bad debts. Enter the transaction letter as the description. Dates must be entered in the format dd/mmm (ie. 15/Jan).
This is the question, i know how to journalize the A.) which comes to $10400 bad debt expense (debit) and 10400 (Credit) for allowance return.
I just don't get how to calculate B.) I checked the answer and it came to $2600 bad debt expense but i don't know how to get that. Please anyone can help me il appreciate it. Thank you very much!