the ledger of montgomery company at the end of the current year shows accounts recei 534033

The ledger of Montgomery Company at the end of the current year shows Accounts Receivable $78,000; Credit Sales $810,000; and Sales Returns and Allowances $40,000.

Instructions

(a) If Montgomery uses the direct write-off method to account for uncollectible accounts, journalize the adjusting entry at December 31, assuming Montgomery determines that Baruth”s $900 balance is uncollectible.

(b) If Allowance for Doubtful Accounts has a credit balance of $1,100 in the trial balance, journalize the adjusting entry at December 31, assuming bad debts are expected to be 10% of accounts receivable.

(c) If Allowance for Doubtful Accounts has a debit balance of $500 in the trial balance, journalize the adjusting entry at December 31, assuming bad debts are expected to be 8% of accounts receivable.