What is the closing balance of the allowance

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Question - East Coast Equipment Sales Company (ECE), which sells to customers only on account, had a $120,000 balance in its Accounts Receivable and a $4,200 balance in its Allowance for Doubtful Accounts on January 1st, 2018. During 2018, the company's sales of equipment were $820,000 and its total cash collections from customers were $780,000. During 2018, the company also concluded that customers with accounts totaling $6,000 would be unable to pay and wrote these receivables off. At the end of 2018, management decided it would use an estimate for bad debts of 1% of its credit sales.

Required -

a) Prepare the journal entry for the company's bad debt expense for 2018.

b) What is the closing balance of the Allowance for Doubtful Accounts at the end of 2018?

c) What is the closing balance of Accounts Receivable at the end of 2018?

Reference no: EM133088233

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