At December 31, Yarrow Company reports the following results for its calendar year from the adjusted trial balance.Credit sales$2,300,000Cash sales1,050,000Accounts Receivable295,000Allowance for doubtful accounts (credit balance)750a. Prepare the adjusting entry to record Bad Debts Expense assuming uncollectibles are estimated to be 1.1% of credit sales.b. Prepare the adjusting entry to record Bad Debts Expense assuming uncollectibles are estimated to be .8% of total sales.c. Prepare the adjusting entry to record Bad Debts Expense assuming uncollectibles are estimated to be 7.0% of year-end accounts receivable.
What will be an ideal response?
| a.. | Bad Debts Expense | 25,300 | ? |
| ? | Allowance for doubtful accounts | ? | 25,300 |
| b. | Bad Debts Expense | 26,800 | ? |
| ? | Allowance for doubtful accounts | ? | 26,800 |
| c. | Bad Debts Expense | 19,900 | ? |
| ? | Allowance for doubtful accounts | ? | 19,900 |
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Joe’s Donut Hole wishes to estimate an appropriate reorder point for cases of a raw material used in making donut icing. The average daily demand is 2 cases. The lead time for replenishment orders is 10 days with an estimated lead time demand standard deviation of 2 cases. For a 99% service level, what should the reorder point for this item be?
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