Reference no: EM132559914

Question - On February 28, Big White Ski Equipment had a $25,500 debit balance in Accounts Receivable. During March, the company had sales of $65,500, which included $60,000 in credit sales. March collections were $53,000, and write-offs of uncollectible receivables totalled $1,250. Other data include:

a. February 28 credit balance in Allowance for Doubtful Accounts is $1,300.

b. Bad debt expense is estimated as 3 percent of credit sales.

Required -

1. Prepare journal entries to record sales, collections, write-offs of uncollectibles during March, and bad debt expense by the allowance method (using the percent-of-sales method). Use March 31 as the journal entry date. Explanations are not required.

2. Prepare T-accounts to show the ending balances in Accounts Receivable and Allowance for Doubtful Accounts. Compute net Accounts Receivable at March 31. How much does Big White expect to collect?