Part BThe company completed the following transactions during 2020.Jan 10 sold inventory to Natty Paul, $11,000, on accountMay 15 wrote off as uncollectible the accounts of Terry Carter, $2,500 and Maggie Cube $400August 04 received 70% of the amount owed by Natty Paul and wrote off the remainder as uncollectibleOctober 26 received 30% of the funds owed from Maggie Cube as part payment of her account which had been written off earlier as uncollectible.December 31, The Aging schedule showed an estimated $116,500 as uncollectible Assume credit sales for 2019 were $312,000 and that on December 31, 10% of credit sales are estimated to be uncollectible. Using the percentage of sales method:Determine the amount to be charged to the uncollectible expense account.Prepare the Allowance for uncollectible account.Prepare the balance sheet extract to show the net realizable value of the Accounts Receivable as at December 31.

The allowance for doubtful accounts is created to record estimated bad debt expense.

Answered: Part B The company completed the…

19th Edition

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Chapter12: Current Liabilities

Section: Chapter Questions

Problem 8PA: Serene Company purchases fountains for its inventory from Kirkland Inc. The following transactions...

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Part B

The company completed the following transactions during 2020.

Jan 10 sold inventory to Natty Paul, $11,000, on account
May 15 wrote off as uncollectible the accounts of Terry Carter, $2,500 and Maggie Cube $400
August 04 received 70% of the amount owed by Natty Paul and wrote off the remainder as uncollectible
October 26 received 30% of the funds owed from Maggie Cube as part payment of her account which had been written off earlier as uncollectible.
December 31, The Aging schedule showed an estimated $116,500 as uncollectible

Assume credit sales for 2019 were $312,000 and that on December 31, 10% of credit sales are estimated to be uncollectible. Using the percentage of sales method:
Determine the amount to be charged to the uncollectible expense account.
Prepare the Allowance for uncollectible account.