During the year ended December 31, 2014, Kelly 's Camera Equipment had sales revenue of $170,000, of which $85,000 was on credit At the start of 2014, Accounts Receivable showed a $10,000 debit balance, and the Allowance for Doubtful Accounts showed an $800 credit balance Collections of accounts re...

Req 1 Dec 10 2014 dr Allowance for Doubtful Accounts xAA 1500 cr Accounts ...

During the year ended December 31, 2014, Kelly's Camera Equipment had sales revenue of $170,000, of which

Question:

During the year ended December 31, 2014, Kelly's Camera Equipment had sales revenue of $170,000, of which $85,000 was on credit. At the start of 2014, showed a $10,000 debit balance, and the Allowance for Doubtful Accounts showed an $800 credit balance. Collections of during 2014 amounted to $68,000.
Data during 2014 follow:
a. On December 10, 2014, a customer balance of $1,500 from a prior year was determined to be uncollectable, so it was written off.
b. On December 31, 2014, a decision was made to continue the accounting policy of basing estimated bad debt losses on 2 percent of credit sales for the year.
Required:
1. Give the required journal entries for the two events in December 2014.
2. Show how the amounts related to and Bad Debt Expense would be reported on the and income statement for 2014.
3. On the basis of the data available, does the 2 percent rate appear to be reasonable? Explain.
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...