Reference no: EM133026620

Question - At the end of last year, the company had $546,000 in outstanding Accounts Receivable and a credit balance for Allowance for Doubtful Account of $44,200. During the current fiscal year, the company reported the following:

1. Service revenue of $1,230,000 was billed to customers on account.

2. $1,350,000 was collected on customers' accounts receivable.

3. The company wrote off $39,400 in accounts receivable.

4. The company collected $3,400 of previously written off accounts receivable.

5. The company uses the percentage of receivables to estimate bad debts expense. Based on experience, uncollectible accounts are expected to be 5% of accounts receivable.

Instructions - a) Prepare the journal entries to write-off of accounts receivable and the collection of the previously written off account during the year.

b) Prepare the current year-end adjusting entry to record bad debt expense.

c) Prepare the accounts receivable section of the balance sheet for the current year end in classified format.