1. Journalize Windy’s transactions that occurred during 2015. The company uses the allowance method.

2. Post Windy’s transactions to the Accounts Receivable and Allowance for Bad Debts T-accounts.

3. Journalize Windy’s adjustment to record bad debts expense assuming Windy estimates bad debts as 1% of credit sales. Post the adjustment to the appropriate T-accounts.

4. Show how Windy Mountain Flagpoles will report net accounts receivable on its December 31, 2015 balance sheet.

At January 1, 2015, Windy Mountain Flagpoles had Accounts Receivable of $ 34,000 and Allowance for Bad Debts had a credit balance of $ 3,000. During the year, Windy Mountain Flagpoles recorded the following:

a. Sales of $ 189,000 ($ 165,000 on account; $ 24,000 for cash).

b. Collections on account, $ 133,000.

c. Write- offs of uncollectible receivables, $ 2,800.