Accounting for uncollectible accounts using the allowance method (percent-of-sales) and reporting receivables on the balance sheetDelta Watches completed the following selected transactions during 2018RequirementsOpen T-accounts for Allowance for Bad Debts and Bad Debts Expense, assuming he accounts begin with a zero balance. Record the transactions in the general joint (omit explanations), and post to the two T-accounts.Assume the December 31, 2019, balance of Accounts Receivable is $136,000. Show how net accounts receivable would be reported on the balance sheet at that date. 2018Estimated that bad debts expense for the year was 2% of credit sales of$450,000 and recorded that amount as expense. The company uses theallowance method.Dec. 3131 Made the closing entry for bad debts expense.2019Jan. 17 Sold merchandise inventory to Mack Smith, $400, on account. Ignore Cost ofGoods Sold.Jun. 29Wrote off Mack Smith's account as uncollectible after repeated efforts tocollect from him.Aug. 6 Received $400 from Mack Smith, along with a letter apologizing for being solate. Reinstated Smith's account in full and recorded the cash receipt.Made a compound entry to write off the following accounts as uncollectible:Cam Carter, $1,400; Mike Venture, $1,200; and Russell Reeves, $400.Dec. 31Estimated that bad debts expense for the year was 2% on credit sales of$510,000 and recorded the expense.3131Made the closing entry for bad debts expense.

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Answered: 2018 Estimated that bad debts expense…

College Accounting (Book Only): A Career Approach

12th Edition

ISBN:9781305084087

Author:Cathy J. Scott

Publisher:Cathy J. Scott

ChapterB: Bad Debts

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Accounting for uncollectible accounts using the allowance method (percent-of-sales) and reporting receivables on the balance sheet

Delta Watches completed the following selected transactions during 2018

Requirements

Open T-accounts for Allowance for Bad Debts and Bad Debts Expense, assuming he accounts begin with a zero balance. Record the transactions in the general joint (omit explanations), and post to the two T-accounts.
Assume the December 31, 2019, balance of Accounts Receivable is $136,000. Show how net accounts receivable would be reported on the balance sheet at that date.

2018
Estimated that bad debts expense for the year was 2% of credit sales of
$450,000 and recorded that amount as expense. The company uses the
allowance method.
Dec. 31
31 Made the closing entry for bad debts expense.
2019
Jan. 17 Sold merchandise inventory to Mack Smith, $400, on account. Ignore Cost of
Goods Sold.
Jun. 29
Wrote off Mack Smith's account as uncollectible after repeated efforts to
collect from him.
Aug. 6 Received $400 from Mack Smith, along with a letter apologizing for being so
late. Reinstated Smith's account in full and recorded the cash receipt.
Made a compound entry to write off the following accounts as uncollectible:
Cam Carter, $1,400; Mike Venture, $1,200; and Russell Reeves, $400.
Dec. 31
Estimated that bad debts expense for the year was 2% on credit sales of
$510,000 and recorded the expense.
31
31
Made the closing entry for bad debts expense.

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