Percent of sales allowance method (Learning Objective 4) 5–10 min.

Wilson’s Auto Repair ended 2013 with Accounts Receivable of $85,000 and a credit balance in Allowance for Uncollectible Accounts balance of $11,000. During 2014, Wilson’s Auto Repair had the following activity:

a. Service revenue earned on account, $545,000.

b. Collections on account, $575,000.

c. Write-offs of uncollectibles, $19,000.

d. Bad debt expense, estimated as 3% of service revenue.

Journalize Wilson’s Auto Repair’s activity for 2014.

AppendixLO1