Question
Mandalay Company requests that you record journal entries for its bad debt expense and uncollectible accounts receivable in 2017. Mandalays January 1, 2017, balances relevant
Mandalay Company requests that you record journal entries for its bad debt expense and uncollectible accounts receivable in 2017. Mandalays January 1, 2017, balances relevant to accounts receivable are as follows: .
Accounts receivable DR $400,000 Allowance for doubtful accounts CR $20,000
During 2017: $45,000 of accounts receivable were uncollectible, and no more effort to collect these accounts will be made. Total sales were $1,200,000, of which $200,000 were cash sales. $900,000 was collected on account.
i) If Mandalay used the credit sales method to estimate bad debt expense and uses 4% of credit sales as its estimate of bad debts, provide the December 31, 2017, Statement of Financial Position disclosure for net accounts receivable.
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