Reconstructing events when using the allowance method. Selected data from the accounts of Logue Corporation before adjusting and closing entries appear below:

Logue Corporation estimates that 6 percent of sales, which are all on account, will become uncollectible. There were no recoveries during the year of accounts written off in previous years.
Set up T-accounts for each of the four accounts above and enter the balances on January 1 and December 3 1 . Enter in the T-accounts the entries that Logue Corporation made during the year for the following:

a. Sales on account

b. Write-off of actual uncollectible accounts

c. Collection of cash from customers from sales on account Enter in the T-accounts the adjusting entry on December 31 to provide for estimated uncollectible accounts.(Appendix)

Transcribed Image Text:

January 1 December 31 Accounts Receivable $115.900 Dr. $122,700 Dr. Allowance for Uncollectible Accounts 18,200 Cr. 2.900 Dr. Bad Debt Expense Sales 450,000 Cr.