Question
Kenora Company started their first year of operation on January 1, 2019.Credit sales for 2019 totaled $200,000 and collections on credit sales totaled $160,000. Kenora
Kenora Company started their first year of operation on January 1, 2019.Credit sales for 2019 totaled $200,000 and collections on credit sales totaled $160,000. Kenora estimated that bad debt losses will be 2.5% of credit sales. During the year, Kenora had a customer who refused to pay and they had to write off $1,000 as uncollectible. Kenora uses the allowance method to account for bad debts.
Required:
a) the journal entries to record the initial allowance for doubtful accounts and the write-off of the uncollectible accounts.
b) the journal entry to write-off the uncollectible account
c) Calculate the 2019 year-end balance in the accounts receivable account
d) What is the net realizable value of Kenora's accounts receivables as at December 31, 2019
e) Assume that Kenora used the direct write-off method to record bad debts.Prepare the journal entry to record the $1,000 that was uncollectible.
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