Accounting for uncollectible accounts using the allowance method (percent-of-receivables) and reporting receivables on the balance sheet

At January 1, 2016, Carl's Garage had Accounts Receivable of $ 34,000 and Allowance for Bad Debts had a credit balance of $ 3,000. During the year, Carl's Garage recorded the following:

a. Sales of $189,000 ($165,000 on account; $ 24,000 for cash). b. Collections on account, $ 133,000. c. Write-offs of uncollectible receivables, $ 2,800.

Requirements 1. Journalize Carls transactions that occurred during 2016. The company uses the allowance method. 2. Post Carls transactions to the Accounts Receivable and Allowance for Bad Debts T-accounts. 3. Journalize Carls adjustment to record bad debts expense assuming Carl estimates bad debts as 1% of receivables. Post the adjustment to the appropriate T- accounts. 4. Show how Carl's Garage will report net accounts receivable on its December 31, 2016 balance sheet.