Koss Co. Ltd. began operations on January 1, 2015. It had the following transactions during 2015, 2016,

Question:

Koss Co. Ltd. began operations on January 1, 2015. It had the following transactions during 2015, 2016, and 2017.
2015 Dec. 31 Estimated uncollectible accounts as $5,000 (calculated as 2% of sales)
2016 Apr. 15 Wrote off the balance of N. Lang, $700
Aug. 8 Wrote off $3,000 of miscellaneous customer accounts as uncollectible
Dec. 31 Estimated uncollectible accounts as $4,000 (1½% of sales)
2017 Mar. 6 Recovered $200 from N. Lang, whose account was written off in 2016; no further recoveries are expected
Sept. 4 Wrote off as uncollectible $4,000 of miscellaneous customer accounts
Dec. 31 Estimated uncollectible accounts as $4,500 (1½% of sales).
Required:
1. Prepare journal entries to record the above transactions.
2. Assume that management is considering a switch to the method of calculating the allowance for doubtful accounts. Under this method, the allowance at the end of 2017 is estimated to be $2,000. Comment on the discrepancy between the two methods of estimating allowance for doubtful accounts. 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...