An inexperienced accountant made the following entries. In each case the explanation to the entry is correct. 27 Cash 780 Bad Debt Expense 780 (Collection of account previously written off as uncollectible under allowance method) \begin{array}{lrr} ext { 27\quad\quad Cash} & 780\\quad\quad\quad ext {Bad Debt Expense } & & 780\ \quad\quad ext { (Collection of account previously written off as } & \ \quad\quad ext { uncollectible under allowance method) } & \\end{array} 27 Cash Bad Debt Expense (Collection of account previously written off as uncollectible under allowance method) 780 780 31 Bad Debt Expense 400 Allowance for Doubtful Accounts 400 (To recognize estimated bad debts based on 1 % of net sales of $ 400 , 000 \begin{array}{lll} ext { 31\quad\quad Bad Debt Expense} & 400\\quad\quad\quad ext { Allowance for Doubtful Accounts} & & 400\\quad\quad ext { (To recognize estimated bad debts based on 1 \% } & \ \quad\quad ext { of net sales of \$ 400,000 } & \\end{array} 31 Bad Debt Expense Allowance for Doubtful Accounts (To recognize estimated bad debts based on 1% of net sales of $400 , 000 400 400 InstructionsPrepare the correcting entries.

Question

An inexperienced accountant made the following entries. In each case the explanation to the entry is correct.    27 Cash 780 Bad Debt Expense  780  (Collection of account previously written off as   uncollectible under allowance method)  \begin{array}{lrr}  	ext {  27\quad\quad Cash}  & 780\\quad\quad\quad 	ext {Bad Debt Expense  }  & & 780\ \quad\quad	ext { (Collection of account previously written off as }  & \ \quad\quad	ext { uncollectible under allowance method)  }  & \\end{array}  27 Cash Bad Debt Expense   (Collection of account previously written off as   uncollectible under allowance method)  ​ 780 ​ 780  31 Bad Debt Expense 400  Allowance for Doubtful Accounts 400  (To recognize estimated bad debts based on  1 %    of net sales of  $ 400 , 000   \begin{array}{lll}  	ext {  31\quad\quad Bad Debt Expense}  & 400\\quad\quad\quad 	ext {  Allowance for Doubtful Accounts}  & & 400\\quad\quad	ext {  (To recognize estimated bad debts based on   1 \%   }  & \ \quad\quad	ext { of net sales of   \$ 400,000   }  & \\end{array}  31 Bad Debt Expense  Allowance for Doubtful Accounts  (To recognize estimated bad debts based on 1%   of net sales of $400 , 000  ​ 400 ​ 400 InstructionsPrepare the correcting entries.

Kristal McCathern · Accepted Answer

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