At december 31, folgeys coffee company reports the following results for its calendar year. cash sales $ 900,000credit sales 300,000 its year-end unadjusted trial balance includes the following items. accounts receivable $ 125,000 debitallowance for doubtful accounts 5,000 debit a. prepare the adjusting entry to record bad debts expense assuming uncollectibles are estimated to be 1.5% of credit sales. b.prepare the adjusting entry to record bad debts expense assuming uncollectibles are estimated to be 0.5% of total sales. c.prepare the adjusting entry to record bad debts expense assuming uncollectibles are estimated to be 6% of year-end accounts receivable.

Explanation:

The journal entries are shown below:

a. Bad debt expense A/c Dr  $4,500

         To Allowance for doubtful debts  $4,500

(Being bad debt expense is recorded)

The computation of the bad debt expense is shown below:

= Credit sales × estimated percentage given

= $300,000 × 1.5%

= $4,500

b. Bad debt expense A/c Dr  $6,000

         To Allowance for doubtful debts $6,000

(Being bad debt expense is recorded)

The computation of the bad debt expense is shown below:

= (Cash sales + Credit sales) × estimated percentage given

= ($900,000 + $300,000) × 0.5%

= $6,000

c. Bad debt expense A/c Dr  $12,500

         To Allowance for doubtful debts $12,500

(Being bad debt expense is recorded)

The computation of the bad debt expense is shown below:

= Allowance for doubtful accounts + (Accounts receivable × estimated percentage given )

= $5,000 + ($125,000 × 6%)

= $5,000 + $7,500

= $12,500

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.