Question
During the current Year, Bobs Ceramics Shop had sales revenue of $153,000, of which $65,000 was on credit. At the start of the current year,
During the current Year, Bobs Ceramics Shop had sales revenue of $153,000, of which $65,000 was on credit. At the start of the current year, Accounts Receivable showed a $24,000 debit balance, and the Allowance for Doubtful Accounts showed a $1,600 credit balance. Collections of accounts receivable during the current year amounted to $57,000.
Data during the current year follows:
a. On December 31, an Account Receivable (Tobys Gift Shop) of $1,700 from a prior year was determined to be uncollectible; therefore, it was written off immediately as a bad debt.
b. On December 31, 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, end of the accounting period. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Journal entry worksheet 2 On December 31, an Account Receivable (Toby's Gift Shop) of $1,700 from a prior year was determined to be uncollectible; therefore, it was written off immediately as a bad debt. Note: Enter debits before credits. Date General Journal Debit Credit December 31 Record entry Clear entry View general journalStep by Step Solution
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