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question the a t cross company is well known for its crosspens the company recently 4290559


The A.T. Cross Company is well known for its Crosspens. The company recently reported the following amounts in itsunadjusted trial balance as of December 31, 2010.


Assume Cross uses 1/2 of 1 percent ofsales to estimate its bad debt expense for the year. Prepare theadjusting journal entry required at December 31, 2010, forrecording Bad Debt Expense. (TIP: The percentage of credit salesmethod directly calculates Bad Debt Expense.)


Assume instead that Cross uses the aging of accounts receivablemethod and estimates that $1,005,000 of Accounts Receivable will beuncollectible. Prepare the adjusting journal entry required atDecember 31, 2010, for recording bad debt expense. (TIP: The agingof accounts receivable method focuses on calculating what theadjusted Allowance for Doubtful Accounts balance should be. Youneed to consider the existing balance when determining theadjustment.)



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