Kenora Company started their first year of operation on January 1, 2019. Credit sales for 2019 totaled $150,000 and collections on credit sales totaled $100,000. Kenora estimated that bad debt losses will be 2.00% of credit sales. During the year, Kenora had a customer who refused to pay and they had to write off $600 as uncollectible. Kenora uses the allowance method to account for bad debts.

Required:

• Prepare the journal entries to record the initial allowance for doubtful accounts. (2 marks)
• Prepare the journal entry to write-off the uncollectible account (2 marks)
• Calculate the 2019 year-end balance in the accounts receivable account (2 marks)
• What is the net realizable value of Kenora's accounts receivables as at December 31, 2019 (2 marks)
• Assume that Kenora used the direct write-off method to record bad debts. Prepare the journal entry to record the $600 that was uncollectible. (2 marks)