The income statement approach to estimating uncollectible

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Reference no: EM13376623

The income statement approach to estimating uncollectible accounts expense is used by Landis Company.

On February 28, the firm had accounts receivable in the amount of $437,000 and Allowance for Doubtful Accounts had a credit balance of $2140 before adjustment. Net credit sales for February amounted to $3,000,000.

The credit manager estimated that uncollectible accounts expense would amount to 1% of net credit sales made during February.

On March 10, an accounts receivable from Kathy Brown for $6100 was determined to be uncollectible and written off. However, on March 31,
Brown received an inheritance and immediately paid her past due account in full.

Prepare the journal entries made by Landis on the following dates:
1. February 28
2. March 10
3. March 31

Assume no other transactions occurred that affected the allowance account during March. Determine the balance of Allowance for Doubtful Accounts at March 31.

Reference no: EM13376623

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