Choices Clothing uses the percent-of-sales method at interim periods and then at the end of each year

Question:

Choices Clothing uses the percent-of-sales method at interim periods and then at the end of each year it uses the percent-of-accounts-receivable method for financial statement reporting purposes. Choices Clothing completed the following selected transactions during 2022 and 2023:image


Choices records all amounts to the nearest cent. Present all amounts to two decimal places.



Required


1. Open three-column general ledger accounts for Allowance for Doubtful Accounts and Bad Debt Expense. Keep running balances.


2. Journalize the transactions in the general journal and post to the two ledger accounts.


3. The December 31, 2023, balance of Accounts Receivable is $501,000. Show how Accounts Receivable would be reported at that date.


4. Assume that Choices Clothing begins aging its accounts on December 31, 2023. The balance in Accounts Receivable is $501,000, the credit balance in Allowance for Doubtful Accounts is $31,975, and the company estimates that $32,000 of its accounts receivable will prove uncollectible.


a. Make the adjusting entry for uncollectibles.


b. Show how Accounts Receivable will be reported on the December 31, 2023, balance sheet.

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question

Horngrens Accounting Volume 1

ISBN: 9780135359709

11th Canadian Edition

Authors: Tracie Miller Nobles, Brenda Mattison, Ella Mae Matsumura, Carol Meissner, JoAnn Johnston, Peter Norwood

Question Posted: