Attempt 1 of 1) 4. Award:0 out of 3.00 points Show correct answer E8-3 Recording, Reporting, and Evaluating a Bad Debt Estimate Using the Percentage of Credit Sales Method [LO 8- During the year ended December 31, 2015, Kelly's Camera Shop had sales revenue of $145,000, of which $72,500 was on credit. At the start of 2015, Accounts Receivable showed a $10,000 debit balance and the Allowance for Doubtful Accounts showed a $550 credit balance Collections of accounts receivable during 2015 amounted to $63,000 Data during 2015 follow: a. On December 10, a customer balance of $1,250 from a prior year was determined to be uncolectible, so it was written off. b. On December 31, a decision was made to continue the accounting policy of basing estimated bad debt losses on 2 percent of credit sales for the year. Required: 1. Give the required journal entries for the two events in December of no entry is required for a transaction/event, select "No Journal Entry Required in the first account field.) Debit Credit General Journal No Date Dec. 10. 2015 Dec 31, 2015 2. Show how the amounts related to Accounts Receivable and Bad Debt Expense would be reported on the balance sheet and income statement for 2015 Kelly's Camera Shop Balance Sheet (partial) At December 31, 2015 Current Assets: Kelly's Camera Shop Income Statement (partial) Year ending December 31, 2015 Operating Expenses: 3. On the basis of the data available, does the 2 percent rate appear to be reasonable? n/r Attempt 1 of 1) 4. Award:0 out of 3.00 points Show correct answer E8-3 Recording, Reporting, and Evaluating a Bad Debt Estimate Using the Percentage of Credit Sales Method [LO 8- During the year ended December 31, 2015, Kelly's Camera Shop had sales revenue of $145,000, of which $72,500 was on credit. At the start of 2015, Accounts Receivable showed a $10,000 debit balance and the Allowance for Doubtful Accounts showed a $550 credit balance Collections of accounts receivable during 2015 amounted to $63,000 Data during 2015 follow: a. On December 10, a customer balance of $1,250 from a prior year was determined to be uncolectible, so it was written off. b. On December 31, a decision was made to continue the accounting policy of basing estimated bad debt losses on 2 percent of credit sales for the year. Required: 1. Give the required journal entries for the two events in December of no entry is required for a transaction/event, select "No Journal Entry Required in the first account field.) Debit Credit General Journal No Date Dec. 10. 2015 Dec 31, 2015 2. Show how the amounts related to Accounts Receivable and Bad Debt Expense would be reported on the balance sheet and income statement for 2015 Kelly's Camera Shop Balance Sheet (partial) At December 31, 2015 Current Assets: Kelly's Camera Shop Income Statement (partial) Year ending December 31, 2015 Operating Expenses: 3. On the basis of the data available, does the 2 percent rate appear to be reasonable? n/r
