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During the year ended December 3 1 , 2 0 2 1 , Kelly's Camera Shop had sales revenue of $ 1 7 5 ,
During the year ended December Kelly's Camera Shop had sales revenue of $ of which $ was on credit. At
the start of Accounts Receivable showed a $ debit balance and the Allowance for Doubtful Accounts showed a $
credit balance. Collections of accounts receivable during amounted to $
Data during follow:
a On December a customer balance of $ from a prior year was determined to be uncollectible, so it was written off.
b On December a decision was made to continue the accounting policy of basing estimated bad debt losses on percent of credit
sales for the year.
Required:
Give the required journal entries for the two events in December.
a Show how the amounts related to Bad Debt Expense would be reported on the income statement.
b Show how the amounts related to Accounts Receivable would be reported on the balance sheet.
On the basis of the data available, does the percent rate appear to be reasonable?
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