E8-3 Recording, Reporting, and Evaluating a Bad Debt Estimate Using the Percentage of Credit Sales Method [LO 8-2]

During the year ended December 31, 2018, Kelly's Camera Shop had sales revenue of $125,000, of which $62,500 was on credit. At the start of 2018, Accounts Receivable showed a $11,000 debit balance and the Allowance for Doubtful Accounts showed a $510 credit balance. Collections of accounts receivable during 2018 amounted to $59,000.

Data during 2018 follow:

1. On December 10, a customer balance of $1,050 from a prior year was determined to be uncollectible, so it was written off.
2. 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.
2. Show how the amounts related to Accounts Receivable and Bad Debt Expense would be reported on the balance sheet and income statement for 2018.
3. On the basis of the data available, does the 2 percent rate appear to be reasonable?

ware%252Fmhepr Google Translate Paraphrasing Tool |... S Shahid Anime - ...90 Sp Make Images, Vide... Desmos | Graphing.. (4) Jah Khalib - MeA.. ork Chot 8 i Saved Method [LO 8-2] E8-3 Recording, Reporting, and Evaluating a Bad Debt Estimate Using the Percentage of Credit Sales During the year ended December 31, 2018, Kelly's Camera Shop had sales revenue of $125,000, of which $62,500 was on credit. At the start of 2018, Accounts Receivable showed a $11,000 debit balance and the Allowance for Doubtful Accounts showed a $510 credit balance. Collections of accounts receivable during 2018 amounted to $59,000. Data during 2018 follow: a. On December 10, a customer balance of $1,050 from a prior year was determined to be uncollectible, 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. 2. Show how the amounts related to Accounts Receivable and Bad Debt Expense would be reported on the balance sheet and income statement for 2018. 3. On the basis of the data available, does the 2 percent rate appear to be reasonable? Complete this question by entering your answers in the tabs below. Req 1 Req 2A Req 2B Req 3 Give the required journal entries for the two events in December. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) View transaction list2.5 points View transaction list Skipped Journal entry worksheet eBook Record the write-off of a certain customer account from a prior year which is References not collectible totaling $1,050. Note: Enter debits before credits. Date General Journal Debit Credit Dec 10, 2018 Allowance for Doubtful Accounts 1,050 Accounts Receivable 1,050 Record entry Clear entry View general journal Req 2A >2.5 points View transaction list Skipped Journal entry worksheet eBook Mc1. Give the required journal entries for the two events in December. 2. Show how the amounts related to Accounts Receivable and Bad Debt Expense would be reported on statement for 2018. pped 3. On the basis of the data available, does the 2 percent rate appear to be reasonable? Book Complete this question by entering your answers in the tabs below. rences Req 1 Req 2A Req 2B Reg 3 Show how the amounts related to Bad Debt Expense would be reported on the income statement? Kelly's Camera Shop his Income Statement (partial) Year ending December 31, 2018 Operating Expenses: Bad Debt Expense $ 1,250 2. Show how the amounts related to Accounts Receivable and Bad Debt Expense would be reported on th ipped statement for 2018. 3. On the basis of the data available, does the 2 percent rate appear to be reasonable? Book Complete this question by entering your answers in the tabs below. erences Req 1 Req 2A Req 2B Reg 3 Show how the amounts related to Accounts Receivable would be reported on the balance sheet? Kelly's Camera Shop Balance Sheet (partial) hs At December 31, 2018 Current Assets Accounts Receivable 11,000 Allowance for Doubtful Accounts 510 Accounts Receivable, Net of Allowance 10,490 1. Give the required journal entries for the two events in December 2. Show how the amounts related to Accounts Receivable and Bad Debt Expense would be reported on statement for 2018. 3. On the basis of the data available, does the 2 percent rate appear to be reasonable? Complete this question by entering your answers in the tabs below. Req 1 Req 2A Req 2B Req 3 On the basis of the data available, does the 2 percent rate appear to be reasonable? Does the 2 percent rate appear to be reasonable?