Harris Company uses the allowance method of handling its credit losses. It estimates credit losses at one percent of credit sales, which were $2,700,000 during the year. On December 31, the Accounts Receivable balance was $450,000 and the Allowance for Doubtful Accounts had a credit balance of $30,600 before adjustment.

Prepare the adjusting entry to record the credit losses for the year.

Show how Accounts Receivable and the Allowance for Doubtful Accounts would appear in the December 31 balance sheet.

a.

General Journal
Date Description Debit Credit
Dec.31 AnswerBad Debts ExpenseAllowance for Doubtful Accounts Answer Answer
AnswerBad Debts ExpenseAllowance for Doubtful Accounts Answer Answer
To record allowance for credit losses.

b. (Do not use negative signs with your answers.)

Current Assets:
AnswerAccounts ReceivableLess: Allowance for Doubtful Accounts $Answer
AnswerAccounts ReceivableLess: Allowance for Doubtful Accounts Answer
$Answer

Nell and kirby are in the process of negotiating their divorce agreement. what should be the tax consequences to nell and kirby if the following, considered individually, became part of the agreement? a. in consideration for her one-half interest in their personal residence, kirby will transfer to nell stock with a value of $200,000 and $50,000 of cash. kirby's cost of the stock was $150,000, and the value of the personal residence is $500,000. they purchased the residence three years ago for $300,000.nell's basis for the stock is $ xkirby's basis in the house is $ xb. nell will receive $1,000 per month for 120 months. if she dies before receiving all 120 payments, the remaining payments will be made to her estate.the payments (qualify, do not qualify) as alimony and are (included in, excluded from) nell's gross income as they are received.c. nell is to have custody of their 12-year-old son, bobby. she is to receive $1,200 per month until bobby (1) dies or (2) attains age 21 (whichever occurs first). after either of these events occurs, nell will receive only $300 per month for the remainder of her life.$ x per month is alimony that is (included in, excluded from) nell's gross income, and the remaining $ x per month is considered (child support, property settlement) and is (nontaxable, taxable) to nell.