Question
At December 31, 2011, Kelso Imports reported this information on its balance sheet. Accounts Receivable $600,00 Less: Allowance for doubtful accounts $40,000 During 2012 the
At December 31, 2011, Kelso Imports reported this information on its balance sheet.
Accounts Receivable $600,00
Less: Allowance for doubtful accounts $40,000
During 2012 the company had the following transactions related to receivables. Bad debt is estimated at 1.5% of credit sales at the year end.
1) Sales on account $2,500,000
2) Collections of accounts receivable $2,200,000
3) Write-offs of accounts receivable deemed uncollectible (Customer default) $45,000
A.) Enter all transactions
B.) Show how the A.R. and allowance account will be presented in 2012 balance sheet.
C.) Suppose this company used Direct Write off method, what will be the bad debt expense for 2012?
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