Reference no: EM131752663
Question: Assume the following events for the year 2011.
a. Credit sales $900,000
b. Cash sales 400,000
c. Accounts receivable balance 1/1/11 70,000
d. Accounts written off during the year were 3,000
e. Allowance for Uncollectibles balance 1/1/11 3,500
f. Seventy percent (70%) of this year's credit sales are collected during the year.
Use the above data set. Assume that the company estimates its annual bad debt expense at 3% of total sales.
1. Compute the bad debt expense and provide the journal entry to show its recognition.
2. Provide the journal entry showing the write-off of bad debts.
3. Show the balance sheet presentation of net accounts receivable
Use the above data set. Ignore 1 - 3 . Assume that the company estimates that 5% of its accounts receivable will not get collected.
1. Compute the bad debt expense and provide the journal entry to show its recognition.
2. Provide the journal entry showing the write-off of bad debts
3. Show the balance sheet presentation of net accounts receivable