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2. bad debts are estimated to be 4% of credit sales. show how accounts receivable and the allowance for doubtful accounts appear on its december 31 balance sheet.
2. bad debts are estimated to be 4% of credit sales. show how accounts receivable and the allowance for doubtful accounts appear on its december 31 balance sheet.
The accounts receivable and the allowance for doubtful accounts will both appear on the December 31 balance sheet. The accounts receivable represents the money owed to the company by customers, while the allowance for doubtful accounts represents the estimatedportionof accounts receivable that is expected to beuncollectible.The accounts receivable and the allowance for doubtful accounts are important accounts that reflect the financial position of a company. The accounts receivable represents the amount of money that the company is owed by its customers for credit sales. On the other hand, the allowance for doubtful accounts is a contra-asset account that is used to estimate and record the portion of accountsreceivablethat is expected to be uncollectible. This estimation is typically based on historical data and industry trends. By recording the estimated bad debts as an adjustment to the accounts receivable balance, the company is able to present a more accurate picture of its financial health on the balance sheet. The allowance for doubtful accounts reduces the accounts receivable balance to reflect the anticipated losses from uncollectible accounts.The accounts receivable represents the amount of money that the company is owed by its customers for credit sales. It is recorded as an asset on the balance sheet. The allowance fordoubtfulaccounts, on the other hand, is a contra-asset account that is used to estimate and record the portion of accounts receivable that is expected to be uncollectible. In this case, the estimated bad debts are 4% of credit sales. This means that 4% of the accounts receivable balance is expected to be uncollectible.By recording this estimate as an adjustment to the accounts receivable balance, the company is able to present a more accurate picture of its financial health on the balance sheet. The allowance for doubtful accounts reduces the accounts receivable balance to reflect the anticipated losses from uncollectible accounts. This estimation is typically based on historical data and industry trends. It is important for a company to carefully manage its accounts receivable and maintain an appropriateallowancefor doubtful accounts to ensure the accuracy of its financial statements.To know more aboutaccounts,visit:brainly.com/question/20381852#SPJ11...