Record the journal entry to adjust for the estimated

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In 2015, Decorators Unlimited had net credit sales totaling $1,200,000. Based on past years, 2.5% of credit sales are estimated to be uncollectible. The balance in the Allowance for Doubtful Accounts account is $12,000.

Problem a. Record the journal entry to adjust for the estimated bad debts on December 31, 2015 assuming Decorators uses the income statement method.

Problem b. On February 1, 2016, the account receivable for B. Stinson of $3,000 is deemed uncollectible. Record the journal entry to write off this account.

Problem c. On July 15, 2016, Decorators Unlimited receives a cheque for $3,000 in full payment from B. Stinson for the account previously written off on Feb 1. Record both the recovery and the payment.

Reference no: EM132726251

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