Determine the amount reported as net receivable

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Reference no: EM1313592

Journal entries to record estimated bad debt in different methods.

Starr Company had the following information relating to credit sales for 2006:

Accounts receivable balance, December 31, 2006	$20,000
Beginning balance in Allowance for Doubtful Accounts	$600 cr.
Net credit sales during 2006	$95,000

1. Prepare the journal entry to record estimated bad debt when:
a. Percentage of sales method is used and 3% of sales are determined to be uncollectible
b. Accounts receivable method is used and $3,400 has been determined to be uncollectible

	Account	Debit	Credit
Dec. 31
1a


1b

2. Using the accounts receivable method:
a. Calculate the amount reported as net receivables:
b. If a bad debt of $1,000 was actually written off, calculate the amount that would be reported as net receivables:

3. Calculate the amount reported as net receivables using the percentage of sales method

Reference no: EM1313592

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