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Chapter 2
Accounting for Receivables
Application Questions Group A
AP-1A (
2
)
On December 31, 2016, your company decides that an allowance for doubtful accounts is
required in the amount of $6,000. There is a zero balance in the account. Prepare the journal
entry to set up the required allowance.
Date
Account Title and Explanation
Debit
Credit
AP-2A (
2
)
Your company decides that an allowance for doubtful accounts is required in the amount of
$6,000. There is a $4,000 credit balance in the account. Prepare the journal entry to set up the
required allowance on December 31, 2016.
Date
Account Title and Explanation
Debit
Credit
AP-3A (
3
)
Your company uses the income statement approach for estimating bad debt. For the year
ending December 31, 2016, credit sales amounted to $1 million. The estimated bad debt is
0.5% of credit sales. Prepare the journal entry to record bad debt expense for the year.
Date Account Title and Explanation
Debit
Credit
