During its first year of operations, Spring Garden Plans earned net credit sales of $ 322,000. Industry

Question:

During its first year of operations, Spring Garden Plans earned net credit sales of $ 322,000. Industry experience suggests that bad debts will amount to 2% of net credit sales. At December 31, 2014, accounts receivable total $ 36,000. The company uses the allowance method to account for uncollectibles.

Requirements

1. Journalize Spring’s Bad Debts Expense using the percent-of-sales method.

2. Show how to report accounts receivable on the balance sheet at December 31, 2014.

Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that... Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...