NOTES FOR JOURNAL ENTERPRISES:
M Jagger sold inventory at a price list of $22,000
Received M Jagger’s sales return for 50% of inventory
The list price for this item was $11,000; M Jagger bought it.
H Gilmore sold the inventory for $100,000 credit
H Gilmore paid the half-off of the amount owed
H Gilmore was bankrupt, so Kuechly paid the remaining balance.
H Gilmore is uncollectible. Hint: Write-off the Account immediately
Because no allowance was made as of yet
J Lennon sells inventory to him for $30,000 credit
What would you do to adjust this?
Kuechly employs the balance sheet method to estimate bad debts
It is estimated that 5 percent remaining A/R at the year’s end will go to this fund.
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