Question
During 2014, Bobs Ceramics Shop had sales revenue of $164,000, of which $55,000 was on credit. At the start of 2014, Accounts Receivable showed a
During 2014, Bobs Ceramics Shop had sales revenue of $164,000, of which $55,000 was on credit. At the start of 2014, Accounts Receivable showed a $19,000 debit balance, and the Allowance for Doubtful Accounts showed a $1,600 credit balance. Collections of accounts receivable during 2014 amounted to $55,000. |
Data during 2014 follows: |
a. | On December 31, 2014, an Account Receivable (Tobys Gift Shop) of $1,000 from a prior year was determined to be uncollectible; therefore, it was written off immediately as a bad debt. |
b. | On December 31, 2014, on the basis of experience, a decision was made to continue the accounting policy of basing estimated bad debt losses on 3.0 percent of credit sales for the year. |
Required: | |
1. | Prepare the required journal entries for the two items on December 31, 2014 (end of the accounting period). (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
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Required 2:
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