Johnson Corporation unadjusted trial balance at year-end include the following accounts. 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. Without considering the balance in the Allowance for Doubtful Accounts, income statement approach, 1% of total sales.
B. Without considering the balance in the Allowance for Doubtful Accounts, income statement approach, 1.5% of credit sales.
C. Considering the balance in the Allowance for Doubtful Accounts, balance sheet approach. The estimate based on an aging of accounts receivable is that an allowance of $12,000 would be appropriate.

Answer and Explanation:

The computations and the journal entries are as follows

A. Uncollectible account expense is

= Given percentage × total sales

= 1% × $1,152,000    

= $11,520

The journal entry is

Uncollectable Expense Dr$11,520  

     To  Allowance for doubtful accounts  $11,520

(Being the uncollectible expense is recorded)

For recording this we debited the uncollectable expense as it increased the expenses and credited the allowance for doubtful debts as it decreased the assets

B.  Uncollectible account expense is

= Given percentage × credit sales

= 1.5% × $1,152,000 × 75%    

= $12,960

The journal entry is

Uncollectable Expense Dr$12,960

     To  Allowance for doubtful accounts  $12,960

(Being the uncollectible expense is recorded)

For recording this we debited the uncollectable expense as it increased the expenses and credited the allowance for doubtful debts as it decreased the assets

C. Uncollectible account expense is

= Appropriate Allowance - credit balance of allowance for doubtful debts

= $12,000 - $2,184

= $9,816

The journal entry is

Uncollectable Expense Dr$9,816

     To  Allowance for doubtful accounts  $9,816

(Being the uncollectible expense is recorded)

For recording this we debited the uncollectable expense as it increased the expenses and credited the allowance for doubtful debts as it decreased the assets

there was no passage listed but using the process of elimination i'd say it was d. the high economy would do the opposite. i don't see how low prices would affect it. high unemployment is possible but i feel d is the better answer.

lady gaga

explanation:

lady gaga's real name is stefani joanne angelina germanotta.