The unadjusted trial balance at year-end for a company that uses the percent of receivables method to determine its bad debts expense reports the following selected amounts: accounts receivable $ 435,000 debit allowance for doubtful accounts 1,250 credit net sales 2,100,000 credit all sales are made on credit. based on past experience, the company estimates 3.5% of ending account receivable to be uncollectible. what adjusting entry should the company make at the end of the current year to record its estimated bad debts expense?

Given that,

Accounts receivable = $435,000

Debit Allowance for Doubtful Accounts = 1,250

Credit Net Sales = 2,100,000

Ending account receivable to be uncollectible = 3.5%

Estimated bad debts:

= Accounts Receivable × 3.5% + Debit balance in Allowance for Doubtful Accounts

= (435,000 × 3.5%) + 1,250

= $16,475

Therefore, the journal entry is as follows:

Bad debts expense A/c        Dr.  $16,475

To Allowance for Doubtful Accounts         $16,475

a manufacturer of printed circuit boards uses exponential smoothing with trend to forecast monthly demand of its product. at the end of december, the company wishes to forecast sales for january. the estimate of trend through november has been 200 additional boards sold per month. average sales have been around 1000 units per month. the demand for december was 1100 units. the company uses α = 0.20 and β = 0.10. make a forecast including trend for the month of january.

answer; microeconomics;