At January 1, 2016, Hilly Mountain Flagpoles had Accounts Receivable of $31,000, and Allowance for Bad Debts had a credit balance of $3,000. During the year, Hilly Mountain Flagpoles recorded the following:

Sales of $174,000 ($157,000 on account; $17,000 for cash). Ignore Cost of Goods Sold.

Collections on account, $131,000.

Write-offs of uncollectible receivables, $2,200.

2. AR, Dec. 31 $54,800

Requirements:

1.Journalize Hillys transactions that occurred during 2016. The company uses the allowance method.

2.Post Hillys transactions to the Accounts Receivable and Allowance for Bad Debts T-accounts.

3.Journalize Hillys adjustment to record bad debts expense assuming Hilly estimates bad debts as 4% of credit sales. Post the adjustment to the appropriate T-accounts.

4.Show how Hilly Mountain Flagpoles will report net accounts receivable on its December 31, 2016, balance sheet.