Boyd Companies was formed in 2015 with the merger of ADF Manufacturing and Freeman Good Foods. The company reported the following rounded amounts for the year ended December 29, 2018 (all amounts in millions):
DebitsCreditsAccounts Receivable$ 1,040 Allowance for Doubtful Accounts $ 31Sales (assume all on credit) 17,500
Required:
- Assume Boyd uses 1/2 of 1 percent of sales to estimate its Bad Debt Expense for the year. Prepare the adjusting journal entry required for the year, assuming no Bad Debt Expense has been recorded yet.
- Assume instead Boyd uses the aging of accounts receivable method and estimates that $77 of its Accounts Receivable will be uncollectible. Prepare the adjusting journal entry required at December 29, 2018, for recording Bad Debt Expense.
- Assume instead Boyd’s uses the aging of accounts receivable method and estimates that $77 of its Accounts Receivable will be uncollectible. Prepare the adjusting journal entry required at December 29, 2018, for recording Bad Debt Expense assuming Boyd’s unadjusted balance in Allowance for Doubtful Accounts at December 29, 2018, was a debit balance of $38.
- If one of Boyd’s customers declared bankruptcy, what journal entry would be used to write off its $25 balance?
