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Determine the balance in the allowance for uncollectible

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Reference no: EM132685160

StorageTek Corporation gathered the following information from its accounting records for the year ended December, 31, 2016, prior to adjustment:

Net credit sales for the year = $1,150,000
Accounts Receivable (Dec 31, 2016) = $93,000
Allowance for Uncollectible Accounts, prior to adjustment (Dec 31, 2016) = $6,000 debit balance
StorageTek Corporation uses the allowance method of accounting for bad debts and estimates bad debts at 3% of net credit sales.

Required:

Problem 1: Prepare the adjusting entry on December 31, 2016.

Problem 2: Determine the balance in the Allowance for Uncollectible Accounts account after the adjusting entry is recorded.

Problem 3: Show how the receivables would be reported on the December 31, 2016, Balance Sheet for Storage Tek Corporation.

Reference no: EM132685160

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