Prepare journal entries for the transactions that occurred

Assignment Help Financial Accounting

Reference no: EM13902453

UNCOLLECTIBLE ACCOUNTS-PERCENTAGE OF SALES; COLLECTION OF ACCOUNT WRITTEN OFF

Chattanooga Fireworks Company (CFC) uses the percentage of sales method of accounting for uncollectible accounts. In the past, approximately 2% of all credit sales have been uncollectible. Credit sales for 20-6 amounted to $850,000. At the end of 20-6, Accounts Receivable had a debit balance of $120,000, and Allowance for Doubtful Accounts had a credit balance of $1,500. The following transactions occurred in 20-7:

Mar.	1	Wrote off the account of J. Dullard for $380.
May	30	Received a check from J. Dullard for $380.

Required:

1. Enter the adjusting entry for bad debt expense at the end of 20-6.

2. Prepare journal entries for the transactions that occurred in 20-7.

Reference no: EM13902453

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